Unless finance is already your background, there are few small-business owners who look forward to maintaining their books and dealing with tax preparation. Save yourself time and frustration by retaining a business accountant in your planning and business process. Many accountants are happy to act as advisors, even if you are doing a lot of the number crunching to save on their fees.

Drawing Salary Versus Building Equity

Your accountant will help you strike a balance between drawing a salary from your business and reinvesting. A small business is likely to show a tax loss for the first few years, even with positive cash flow, because money is being reinvested for growth. Tax losses should only be a factor supporting growth — not a business strategy. Unless your business is a hobby, be sure that you are either creating an income that you can draw, pay taxes on, and then invest for retirement, or that your business is growing into an asset that you can sell profitably. Better yet, why not plan on creating the best of both worlds by drawing a salary and building a valuable business?

Planning for Self-Employment Taxes

Self-employment taxes are a part of doing business. Whether they are considered true self-employment taxes because your business is small and you're the only one drawing income, or they're coming out of your business revenue as the business's and employees' shares of the FICA taxes, planning ahead to minimize surprises is important. In addition to making regular quarterly reviews of your business performance, plan on having your accountant review your business income and expenses in the early to mid-fall of each year. She can help you calculate whether you're on track toward a larger or smaller profit than last year. She can check whether you're having too much, too little, or the right amount of tax withheld from your income, and she can help you plan for any year-end retirement plan contributions or purchases to save taxes.

Passing Expenses Through the Business

Many business owners lose track of their true personal expenses because their business does so much for them. They attend conferences, take clients to dinner, drive a company car, and might have a beautiful home office that the business pays for. Your accountant will back out the disallowed expenses and you'll pay tax on them. Unfortunately, unless the business owner is writing the checks, he often loses track of his true living expenses. Not knowing your lifestyle costs can make retirement planning difficult. Be sure to account carefully for the added lifestyle perks that the business provides you so you're not surprised after you retire.

Working from Home

Check the IRS rules before you decide to claim a home office for tax purposes. Although recent cases have relaxed the treatment of a home office deduction, you still need to be sure taking the deduction is in your best interest. Assuming that your office meets the IRS definition of a home office — including exclusive business use and being required for the business — if your house has a large capital gain or if you're planning to sell and move soon, it may be better to ignore the home office deduction altogether. The home office deduction gives you an expense against your business income, but it also creates a small piece of business property — your office — that is now embedded in your home. When you sell your residence, the home office portion might be considered commercial property and would be excluded from the capital gains tax advantages enjoyed by your residence.