Avoiding the Tax Season Rush: What to Have Ready for Your Tax Professional

As a small business owner, it only makes sense to have a tax professional prepare your taxes. Not only do you save yourself time and a potential headache, but a tax professional can also help you save on your taxes. In order to help you avoid the tax season rush, we at Taurus CPA Solutions came up with a short list of what you should have ready for your tax professional before you see them.

 

Financial Statements

Your tax preparer will need copies of your general ledger, income statement, and balance sheet. If you use cloud accounting software to keep track of your finances, then the tax professional will need access to look over all the details. That way, they can do their work more efficiently, fix some inefficiencies they encounter and show you why, and ask you about certain expenses or balances they see.

 

Identification Information

Even though you know who you are, and you’ve likely worked with the same tax professional in the past, they may still need to see one or several forms of identification. At the very least, you’ll need to provide your social security number. If your business has a separate EIN, the accountant will need that number too. You may also need to provide your bank account and routing numbers and a copy of your driver’s license for some state filings.

 

Income Statements

Always report any income you or your business takes in. This includes dividend and interest income, unemployment, social security, capital gains, inheritance, independent contractor payments, cryptocurrency transactions, lottery winnings, commissions, tips, royalties, and a few others. If you’re uncertain as to whether the money you’ve earned is taxable, speak to your tax professional.

 

Proof of Expenses for Deductions

If you have business expenses, you’ll need to provide the details of those costs. While your accountant may not need to see your receipts, you should retain those in your files as the IRS may ask to see them should you be audited.

Your accountant will need totals of your expenses, by category.  Deductible business expenses may include advertising, insurance, interest, office supplies, mileage, software, and telephone, among others.  If you have a home office, you may need to provide the totals, and the square footage of your office area along with your rent or mortgage payments, property taxes, insurance, and utilities. The specifics of your business will determine the expenses you are able to deduct against your business income.  Typically, you will be able to deduct expenses that are “ordinary and necessary” to operate your business and generate income. 

If you’re self-employed, you may also need to provide information on your health, dental, and vision insurance premiums.

 

Recent Tax Return

There is a significant amount of information contained in your prior year’s return that will get your accountant off to the right start. It’s faster to look at a sheet of paper than it is to ask a question and gather details from a response.

Gathering all the needed information to file your taxes can be stressful, which is a good reason to start early. When you have everything in place before you meet with your tax professional, your appointment goes more smoothly and better sets you up for success. At Taurus CPA Solutions, you can depend on us to complete your taxes accurately and quickly. You can reach out to us by filling out our online form, emailing us, or calling us at 410-465-4600.