As you close out last year’s books and ship them off to your CPA, don’t go on auto pilot. Instead, stay engaged in the annual tax process. You’ll lower your tax bill, save on CPA / bookkeeper fees, and help avoid a tax season cash flow shortfall. Here are some insider tips how to do that…

Start with a few practical matters. Ensure your bookkeeper has advanced the closing date on your QuickBooks file to prevent “after the fact” changes that will drive your CPA crazy and drive up the cost of your return. Also, ask your CPA for some convenience items: a PDF version of your returns for easy reproduction throughout the year, a full trial balance, and what’s called, “Next Year Depreciation Schedule.” These little things will save your bookkeeper time.

Now set a schedule (IRS tax calendar) with your CPA to complete both business and personal returns. Promptly respond to requests for information and leave time before the filing due dates to review the returns. You should be familiar with the essential logic of your tax returns. If you need CPA-prepared financial statements (compiled, reviewed, or audited) ask for a quote and timeline.

Ask for a “good enough” estimate of your tax liability before the return is completed.  Plan ahead. Fold both 2006 and 2007 tax liabilities into your cash flow forecast: expected tax liability for your business entity and personal returns, minimum W-2 withholding to avoid penalties, and schedule for making estimated tax payments.

Income tax is one of an entrepreneur’s largest expenses, but some CPAs don’t offer tax advice unless asked. Ask how you can lower your tax bill and explore your risk tolerance: do you want conservative, moderate or an aggressive tax strategy? While you’re at it, when’s the last time you asked your CPA to help you get rich? Tap into her experience. You never know: she might come up with a million dollar idea.