Why your CPA might be costing you THOUSANDS (and you don’t even know it)

#entrepreneurship #franchisebusiness #podcast 

This Built4Profit Podcast episode argues many business owners miss $5,000–$15,000 annually by treating their CPA relationship as year-end compliance instead of proactive tax planning. 

Elizabeth and Sha share key topics to discuss with a CPA, including whether the business has the right entity structure, how to pay yourself and determine a reasonable salary, and whether strategies like the Augusta Rule or putting kids on payroll apply. 

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Transcript

SPEAKER_00 0:00

Most business owners think their CPA is saving them money, but in reality, they might be leaving thousands of dollars on the table. Welcome to Built for Profit Podcast, where entrepreneurs share real stories and strategies that actually work. We're here to inspire, challenge, and give you the playbook to profit with purpose. Let's get into it. Let's do it. That's not a conversation about bad CPAs, but it is a conversation about how operators and franchisees and business owners need to show up with their knowledge. Absolutely.

SPEAKER_01 0:30

I mean, CPAs are really important to a business owner. But their job and their compliance, right? They're making sure that things are in order and they're trained to look at what happened, not trained to figure out what you want to happen or strategies. And how do you know you have a good CPA? Is it if you get money back on your tax return? Yeah, that would be a good indicator. But it's like we go in, get referrals, or maybe even our business owners, they will be handling their personal and now they're into a business situation. Those are different kinds of conversations.

SPEAKER_00 1:00

Absolutely. The conversation that a business owner usually has with their CPAs, like they hand over their taxes at the end of the year and then they say, like, are we good? What do I owe? Yeah, it's like on a scale of like good and not good. So we've got a few strategies, tips. We're not CPAs, you're not gonna feel like you're talking to CPAs during this, but any business owner can walk away from this episode knowing how to vet my CPA to make sure that they're the right one. And I know exactly some questions to ask them so that we can level up my business and personal finances.

SPEAKER_01 1:28

Absolutely. It's one of the number one questions as an advisor when you sit down with, they will ask, Do you have a good referral for CPA? And you know, how do you interview or when do you should you expect from them? If you're not talking to them throughout the year and they're connecting with you in January and say you start sending me your stuff, you know, that's reactionary. We want proactive. Proactive is they may check with you quarterly to make sure that you're not having a good year because that could be game-changing to your bottom line. Or what strategies can you implement? Or you've reached a certain threshold and you need to identify different strategies or changing your entity structure. It should be a proactive conversation. And we do say you ask better questions, you get better results. I do believe that. And this is a shout out from my retired CPA. She had pages of questions she'd ask. If we didn't check everything the yes or no, or have an explanation on it, she would go this one. She would go through every question, no matter what. If she asked you every year, because something may change. So you want them to be proactive quarterly or that year. But when do you start tax planning, Elizabeth?

SPEAKER_00 2:27

You should start in the beginning of the year. So we're bringing to you some examples of things that you can confidently take to the table to talk to your CPA. In general, in the US, the average small business loses five to fifteen thousand dollars a year based on not tax planning properly. Ouch, we'd all like that money back. It comes down to being proactive and doing stuff throughout the year and bring some things to your CPA like, hey, this is where I'm at right now. Let's take a look at it. What other tax strategies should I be looking at that I should be taking advantage of? And at that point, they should be pulling in, or even you can ask, I've heard of this Augusta rule. Does that apply? You don't have to know the tax code. And I think that's so important that you understand. We're not saying like on top of marketing and all the other hats you need to wear, you also need to know the tax code. No, but if you come to them and say, I've heard about this kids on payroll thing, what is that? Does it apply? And it was one of the driving forces that led us to create our products with IQ for profit because business owners are so busy running their business and we were just seeing so many areas where they just needed to be told, this is exactly what this is, this is when it would apply to you. And if you want to do it, here are the templates to go implement it. And they're saving thousands.

SPEAKER_01 3:41

Boom. Absolutely. Because I mean, it's already intimidating enough the tax code. Oh my gosh. I mean, all the different laws and regulations that go with it. We want to cut through and be relevant to what really is at value to the entrepreneur without overwhelming.

SPEAKER_00 3:54

No one needs another thing to do. That's not how we operate.

SPEAKER_01 3:56

You know, in even some of the questions that going back to asking your CPA or having the conversations, how best should I pay myself?

SPEAKER_00 4:03

Most people would be surprised if you're an LLC versus even take that S-corp election or you're a corporation. I was shocked that people didn't know if they should be doing a distribution, if they needed to be a W-2. And that matters. And something as simple as that can get you in trouble for an audit when you're like, I wasn't even trying to do anything wrong. So, how you can pay yourself and what that reasonable salary is. I find that that's a common question. But it's reasonable.

SPEAKER_01 4:31

Especially when you first start off, you're like, money. Everyone's had the April 15th and they're like, oh, okay, here we go again. But the strategies to implement, to utilize all these things, and I can tell you this consistently. I wish I would have implemented this sooner because it's just money on the table. They put really good tax codes for entrepreneurs. They're the number one employer, small business owners in the United States. They think they're not big enough to qualify or something like that. But get a really good CPA, have that conversation, and sit down and go, let's strategize, let's be proactive, let's talk about goals. When I hit here, we're gonna do whatever and have check-ins, even just a plan. When you hit this, you come back and we're gonna look at doing these different strategies. Those are the conversations that add value because then you know someone is on top of it.

SPEAKER_00 5:18

And one of my favorite things that you were saying about being an entrepreneur are that there are so many things put in place, but they are to benefit entrepreneurs that you don't get to take advantage of if you're just a W-2 employee and don't have that entrepreneurship benefit. So the IRS wants you to take advantage of them. And that's one of the benefits of being a business owner. So to not do that is naive and a little bit irresponsible because you're leaving money on the table. So let's dive into just some of the questions that they can ask their CPA at any time of the year so that they are being proactive. I think one of the first ones is am I the right type of entity? They will look at your numbers and say, you know, if you're over that$80,000 to$120,000 threshold, taking the S-Corp election might be the right answer for you. Again, we're not here to figure that out today, but you are supposed to leave here knowing one of the questions I need to ask is, am I the right type of entity and should I remain that moving into the next tax year? Because if you're gonna make that election, that would be no. Yeah.

SPEAKER_01 6:15

And what strategies should I be taking advantage of where I am right now? And then what does it look like the next level? When do I go? Yeah, this makes sense to have a retirement plan or whatever the next level is, but just do a check-in. And hopefully it will inspire a conversation with he or she will ask a lot of questions about what's going on in your business because it's a relationship. You guys are in this together, the strategy. And then, like I said, doing the compliance.

SPEAKER_00 6:38

Yeah. And you know, in April or June is the time that you look and you say, what other things can I be doing this year to reduce my tax liability? Because to Shay's point, even January 1st, sometimes it's too late to ask some of those things. So ask it early. And CPAs, because they do like numbers, they will light up and gravitate to people who are showing interest and having knowledge. You know, it's like you start talking to someone who's into what you're into and they're like, oh, well, let's dive in and look at what tax strategies. I love that you're interested in this, you know?

SPEAKER_01 7:10

Absolutely. I mean, we are proactive and pro CPAs. This is not against anything. It's just making sure it's a relationship that you're working together as a team to optimize all the possibilities of being an entrepreneur while minimizing the risk in taxes.

SPEAKER_00 7:24

And something else that we see is that sometimes business owners aren't having the same person do their personal and business taxes for whatever reason. And getting that under one roof is so important because you do make decisions differently of what the business needs to be, tax entity-wise, things like that, when you know also the personal income. Is there a spouse? Are there benefits in these other areas? Do you have kids? And decisions are made very different when the whole picture can be seen.

SPEAKER_01 7:51

You know, and we have a whole training on that. It's just as important what you own, right? Whatever you own is where the owner is, whether it's personal or business or different things, because there's different consequences and tax strategies and different things that go with that. Yeah. Because you know, Elizabeth, we haven't ran into the person yet, or I haven't. He's going, you know what, Shay? I am just not doing my part for taxes. I feel like I could step up my game, write a little bigger check, you know, help the economy a little bit out there. I just haven't had that conversation. Have you?

SPEAKER_00 8:17

I'm waiting for it. There is a confidence that comes with understanding these types of numbers in your business. When you are not showing up to the meeting with your CPA just saying, like, how does it look? What'd they say? Yeah. You're showing up feeling like you already know a little bit what to expect and you know that you made the right decisions along the way the year ahead because you were proactive.

SPEAKER_01 8:38

You know, and it's amazing that if you ask someone, I'm asking you right now, are you 100% certain and confident that you're not leaving any money and opportunity on the table when you file your tax return? It's over half the people that say, not really. I think I've I I really like them or I feel good about it. You know, it's not that certainty. And you want to be confident that you're utilizing every opportunity there is for being an entrepreneur.

SPEAKER_00 9:00

Yep, absolutely. And that's what we're here to help you do. Helping the can-do kids, can't not even helping, supporting other entrepreneurs is what we're about. Why we built the Built for Profit podcast and IQ for profit. And remember, we're on Apple, Spotify, and YouTube now. So you can listen or watch wherever your favorite is. But make sure that 2026 is a different tax season for you. You do that by starting now. Even though you just wrapped up 2025 taxes, get ahead for 2026 and make this a different tax year for you. Absolutely. Because when you know better, you do better.

SPEAKER_01 9:32

One of the heaviest loads business owners carry are taxes and expenses. They can make or break your bottom line.

SPEAKER_00 9:40

Yes, we see it every day. And that is why we have partnered with Lightening the Load, expert tax strategists and CPAs. And they help you get a deep dive on those numbers, uncover different strategies, and keep more of what you've actually earned.

SPEAKER_01 9:53

They don't just file returns, they lighten the load for you with confidence. And that way you can grow and scale your business.

SPEAKER_00 10:00

So check out it's in the show notes below. We got a 30 minute free consultation for you with lightening the load, and you're talking to a CPA. Unbelievable. So click on the link below and take advantage of it. We'll see you in the next episode.