How to Strategize Your Tax Return All Year

Every dollar a tax accountant saves goes straight to the bottom line. That’s why the best accountants work on your tax return all year long. A great accountant can be external or in-house, but you need to know what you’re shopping for.

Compliance vs. strategy

When your accountant prepares and files your company’s return, that’s compliance. When your accountant develops ways to legally reduce what you owe, that’s strategy. Compliance is mandatory. Strategy delivers to the bottom line.

To minimize your tax burden, you need an accountant who works in lockstep with you throughout the year to develop viable strategies and still delivers on time when compliance is due.

External or in-house?

Either option can work, but you need to run the math and trust your gut.

If you go external, look for someone who operates as a consultant rather than a preparer: someone who works with you all year, not just during filing season. Pick someone you get along with who can explain things simply, then weigh price and credentials. Be wary of unusually cheap accountants. A low price usually signals a high-volume, compliance-focused practice where you’re just another number.

If you go in-house, ask whether your internal accountant has a real tax background. If they do, the tax savings they generate can cover their salary on their own, and everything else they do for the company is a bonus.

What a good internal accountant does

To judge whether your in-house accountant is pulling their weight, ask whether they do these things:

• Documentation. They keep thorough records, so if the IRS challenges an expense, there’s a clear paper trail to support it.

• Research. They read court cases and rulings involving businesses like yours and look for strategies that apply.

• Compensation structure and timing. They pay close attention to how and when compensation is paid, because timing often drives the tax outcome.

• Asking questions. Much of the job is simply asking the rest of the team what’s going on. Engineers and other non-finance staff often don’t realize their day-to-day decisions have tax implications, and they won’t think to flag them for finance.

The R&D credit: where involvement pays off

The research credit is the clearest example of why your accountant needs to be involved across the whole business. Many companies assume R&D means lab coats and patents. But if your team is designing new products, improving manufacturing processes, building software, or testing ways to make something work better, your accountant should be working to capture those costs as qualified research expenses.

The research credit is a dollar-for-dollar reduction in tax, not just a deduction. Qualifying expenses include wages for the people doing the work, supplies used in experimentation, and generally 65% of contractor costs. Qualified small businesses can apply up to $500,000 of the credit against payroll taxes each year. To qualify, a company needs under $5 million in gross receipts and no more than five years of receipts. That means a young company can benefit before it’s profitable.

The same work also matters under Section 174. Under the 2025 tax law, domestic research costs can once again be deducted immediately instead of being spread over five years. Some smaller businesses can even go back and recover deductions from 2022 through 2024. Whether you claim the deduction, the credit, or both, the planning has to happen while the work is underway.

The catch is that the credit lives and dies on documentation. The IRS expects you to show what technical uncertainty you were trying to resolve and how you experimented to resolve it. That record is far easier to build as the work happens than to reconstruct a year later. Your engineers won’t think to tell finance that their prototype testing might be worth money. A good accountant will be asking, tracking time, and catching it.

Bottom line

Dropping off your records once a year for someone to prepare is compliance. Working with someone continuously to shape the outcome is strategy, and strategy is what pays for itself.