Can you imagine …
Your books being screwed up to the point where you own over $100,000 in taxes to Uncle Sam, Cousin Sam (the state sales tax), and Brother Sam (the state income tax) 😱!
But, now … imagine still owing $100,000 to the same uncle, cousin, and brother because you hired an accountant that wasn’t sophisticated with the US Tax Code 🤯!
And, I’m not just making this up.
That was the truth for one social marketer that decided that a cheaper accountant was the best route to take after a few more recommendations received.
However, after more than a few DIY 1x1 trainings and done-for-you tax preparation services, our sister company was able to reduce the tax bill by 6-figures.
And here’s how you can do it too with DIY tax tips …
The truth of the matter is, you need a checklist to follow to figure out if your CPA team has included EVERYTHING in your books. And here are a few areas to start …
1. Your Bank Statements
Most people think the bank statements are just that. But when we use the term bank statements as actual accountants, we are talking about banks, credit card statements, and short-term loan statements.
Make sure you bookkeeper has all these things. Because, if not you could be missing a ton of deductions that will result in you overpaying Uncle Sam.
2. Your Financial Statements
It is no secret that the truth is in your financial statements.
But, do you know which part of the financial statement bundle is the most accurate!
Your Balance Sheet. This section is not a masterclass to teach you about the beauty of the 3 main statement; however, you need to look to see if your balances across your accounts seem right.
Ask your accountant for your management reports for the latest month. Compare you bank balances in the asset section of your balance sheet to your bank statements and viola … you’ll know where mistakes are hidden if they don’t equal each other.
There’s way more information than I can offer in this short write-up, but this is the sleeziest way to catch if you Accountant is doing their job right!
3. Your Money Transfers
Along the same lines of reviewing the asset section of your balance sheet, you can also review your equity section.
In your equity section, it will tell you how much money you’ve spent personally outside of business expenses in your business in an account that’s called distributions or owner draws.
If you look at that section and the number feels way too high, ask you accountant for the sub-ledger for that account alone to review it.
This is where most deductions get trapped and when you don’t review these you’ll end up overpaying your uncles, cousin, and brother accidently!
Now, what if I told you …
There are way more secrets to audit your bookkeeper with our year-end check list that you can leverage monthly going forward!
Stay tuned and let us know what your biggest questions are in the comments below.