Small Business Tax Preparation Checklist

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What do I need to give my accountant for tax season?

This is a question my team and I get a lot so we compiled this blog post to act as a checklist for you. First, before you even think about handing over your QuickBooks file to your accountant you need to take the following steps. 

  1. You need to make sure that all of your transactions (income and expenses) for the year are entered into your accounting system.
  2. Make sure all of your accounts have been reconciled. This not only ensures that your income and expenses are in your system but that they are allocated to the correct accounts.
  3. Profit and Loss statements also need to be generated and reviewed for accuracy to make sure that adjusting entries don’t need to be made.

That list might seem daunting, and the whole reason why you’ve been putting your bookkeeping off until now. However, we promise it’s not that bad if you have the time and patience to dedicate to it.

If you don’t have the time, or patience, to dedicate to it just know that we have a service developed just for this. It’s called Catch-Up/Clean-Up Bookkeeping. We do all of the above for you so you don’t have to waste your time doing it. You can focus on doing what you do best, helping your customers. To take advantage of this offer all you have to do is click here and schedule a call. 

Now that you know what you need to do to make sure that you have everything entered into your system and you have your profit and loss statements for each month, you need to review them for accuracy. This is a VERY important step because if you have an expense booked in the wrong account then you could be missing out on a tax deduction. If you mistakenly overstated your income you could be paying more than necessary in taxes and no one wants to do either of those!

If you aren’t sure what you’re looking at, or how to tell if everything is accurate, don’t worry! We can help you review your QuickBooks Online file to make sure it’s all accurate and that you are taking advantage of all deductions you can with your expenses. To book this service just schedule a call with us here

Now, once all of that is done you’re finally ready to hand over your information to your accountant. Here’s what you’ll need to send over:

  1. Personal information – this includes your social security number and business EIN number
  2. Previous year’s tax return – this will allow your accountant to see what deductions your business has, and hasn’t, been taking. Where the gaps are in your filings as well as get a better understanding of your business
  3. Financial Business Reports
  4. Tax Forms – this includes the Income Statement (profit and loss statement), balance sheet and statement of cash flows
  5. Asset Information – your accountant needs to know about any assets you have purchased, depreciated or sold throughout the year. You’ll also need to bring any receipts, proof of sale or reports associated to the depreciation of your assets
  6. Loan Information – if you have taken on any new loans you’ll need to bring all of the paperwork with you. If you have an existing loan you’ll want to bring in records of all the of payments and interest paid 
  7. Income Records – this is to verify that the amount of income state on your income statement is indeed correct. Documents to verify income are usually bank statements but can also be deposit slips or sales invoices 
  8. Expense Records – this is to verify the expenses actually incurred and also to have proof of purchase as required by the IRS. Receipts, credit card statements and and bank statements are the most common documents requested
  9. Deductible Expense Information – if you plan on claiming the following expenses as deductions you’ll have to bring back up for your accountant: home office deduction, mileage expense, travel and donation. Each require a different set up back up but be sure to keep all receipts associated with these expense deductions
  10. Payroll Data – you’ll need to gather your employees W-2s, W-3s, 1099s and any health insurance information 
  11. Inventory Total – your cost of goods sold information is going to be needed for a few tax forms. This information can be found on your profit and loss statement. 
  12. Stocks & Bonds Information – you’ll need to bring any information about stocks and bonds your business has attained or sold during the year. You’ll also need a record of any owner’s investments made into or withdrawn from the company during the year.

This is just a general list of what needs to be brought to your accountant and she will advise you if any other documentation is required but if you’ve been practicing good bookkeeping throughout the year, or hired a professional to keep you up to date, you should have all of this at your fingertips already. If you don’t then you’ll want to seriously consider hiring a professional to help you. Bookkeeping is one of the single most important investments that a business owner can make in their business. 

If you have any questions be sure to leave a comment below or find us on Instagram, @balanced_ledger, and send us a DM. We’d love to chat to see how we can help!