Tax Season and Your Exit Strategy: What to Ask Your CPA

Introduction

Tax season puts business owners in close, regular contact with their CPA at a time when financial records are already top of mind. That makes it a natural, low-pressure opportunity to widen the conversation beyond this year’s return and touch on how the business is structured for a future sale. Tax considerations touch nearly every part of a transaction, from how a deal is structured to how much of the proceeds an owner ultimately keeps, and many of the most impactful decisions need to be made years before a sale, not during it.

This is not about seeking specific tax advice in this article; that conversation belongs with a qualified CPA who understands the full picture of an owner’s business and personal finances. Instead, the goal here is to outline the kinds of questions worth raising during tax season so that exit planning and tax planning move forward together rather than as separate, disconnected efforts.

The following sections walk through key areas to raise with a CPA, along with risks to be aware of and steps for keeping tax and exit planning aligned.

Why Tax Planning and Exit Planning Are Linked

The structure of a business, how income has been reported, and the type of entity it operates as all influence how a future sale will be taxed and how it can be structured. Decisions made long before a sale, such as entity type or how assets have been depreciated, can meaningfully affect after-tax proceeds. Because many of these decisions cannot be easily changed close to a transaction, tax season offers a natural checkpoint to confirm that the business’s structure still aligns with the owner’s long-term goals.

Questions Worth Raising With Your CPA

Entity Structure

Ask whether the current entity structure still makes sense given the owner’s timeline and goals. Business structures are often set up early on for simplicity or startup costs, without much thought given to how they will affect a sale years later. A CPA can explain the general implications of the current structure and whether it’s worth revisiting.

Timing Considerations

Ask how the timing of a potential sale, including which calendar or fiscal year it falls in, might interact with other income, expected deductions, or changes in personal circumstances. Understanding these dynamics in advance allows an owner to make more informed decisions about when to bring a business to market.

Basis and Recordkeeping

Ask what records the CPA will need well in advance of a sale to accurately calculate basis and support the numbers reported on a future return. Gaps in historical recordkeeping are far easier to address years ahead of a transaction than in the weeks before closing.

Risks to Monitor

Owners who wait too long to involve their CPA in exit planning often run into avoidable complications:

• Discovering late that the business’s entity structure is not well suited to the intended deal structure
• Incomplete records that make it difficult to establish basis or substantiate historical figures
• Missing the opportunity to make structural changes that require lead time to take effect
• Underestimating how a sale’s timing interacts with other tax events in a given year
• Treating the CPA and business broker as separate, unconnected advisors rather than a coordinated team

Strategic Advice

Owners can make tax season a productive part of exit planning by taking these steps:

• Schedule time with your CPA specifically to discuss exit and succession plans, separate from the standard tax return conversation
• Ask your CPA to review whether your current entity structure still fits your long-term goals
• Request a summary of what documentation will be needed well before a sale is initiated
• Introduce your CPA and business broker to one another so they can coordinate on structure and timing
• Revisit this conversation annually, since tax rules and personal circumstances both change over time

Conclusion

Tax season is often viewed as a compliance exercise, but for owners who are thinking about an eventual sale, it is also a valuable planning opportunity. Raising exit-related questions with a CPA while financial records are already fresh helps ensure that tax planning and exit planning move forward together, rather than colliding at the last minute. A short conversation now can prevent costly surprises later.

Related Articles

• IRS: Selling a Business
• SCORE Small Business Resources