I just finished my first round of Executive Link meetings. In addition to being a facilitator I also presented the continuing education session where we dug deep into economics, finance, and income taxes. Although it can be a dry and boring topic, we had great discussions during and after the presentation. A common request from EL members was for me to create a list of questions to help them dig deeper into their business with their tax preparers. As a disclaimer, I am not a CPA. I have my Master’s Degree in Agricultural Economics and have attended income tax schools every year since 2015, so my title is simply a qualified educated tax preparer specializing in farm and ranch businesses. I want you to know that I write with some hesitation because I don’t want to be that guy stepping on the professional’s toes. These are just some of my thoughts on what to ask yourself and/ or your tax preparer.
Do you provide them sufficient, quality records on time?
Do you keep your business and personal finances separate?
Is my taxable income representative of my business profitability?
Is my taxable income representative of my family living?
Am I paying into Social Security and Medicare?
Does my tax depreciation match my loan payments on those assets?
Are livestock sales and purchases reported correctly?
Are we managing or minimizing taxes?
What is my deferred tax liability?
Who else needs to be on my business team to maximize wealth growth?
Most commonly in agriculture, your team will include an accountant, banker, lawyer, and family. Your team could also include industry wide resources like Executive Link. It is hard to write up blanket recommendations because every operation is different from the next.
My financial goal for you is to maximize after-tax wealth accumulation. That’s why the team you have is so important, together you should be moving forward towards your goals. In fact, join myself and Clay Conry on December 20th for a live RFP Online webinar for more discussion on this topic.