Businesses tend to have complex and specialized tax needs, so it's never too early for owners to start tax preparation. One way to get a head start is to gather essential documents that will be needed when it’s time to file taxes. Below, three of these documents are discussed in more detail.

What Tax Preparation Documents Should Business Owners Compile? 

1. Receipts for Business Purchases

Identifying any and all business-related deductions is a crucial part of tax preparation. Many deductions come from the business purchases an owner makes throughout the year. Compile and organize these receipts or bills of sale. Go through each one, write down a description of the item, and document when the item was first utilized in your business. If the item was used for both personal and business reasons, record what percentage of its total utilization was for business purposes.

2. Gross Receipts for Sales & Services

Another important part of tax preparation involves submitting proof of money the business has earned throughout the year. The best way to do this is to collect receipts for all sales made or services performed. Figure in any returns and allowances that may have been made so you can provide the most accurate numbers. Also, business-related checking or savings accounts can accrue interest, and this too is considered income — be sure to have bank statements that reflect these earnings.

3. Employee Documentation

Wages paid to employees or contractors will need to be accounted for on your business tax forms. There are several documents to have on hand that can make this information easier to record. W-2 and W-3 forms, federal and state payroll returns (Form 940 or 941, for instance), and 1099 forms from independent contractors are all helpful.

Compiling the necessary documents is an important step in tax preparation. To make sure your business is protected and following all applicable tax laws, trust the tax and accounting services of Sharrard, McGee & Co., PA. For nearly 40 years, they have provided business clients throughout Guilford County, NC, with all manner of accounting and financial support. With two convenient locations in High Point and Greensboro, you’ll have access to an experienced team of tax advisors that will take care of your tax filing and finances, so you can focus on growing your business. Call (336) 884-0410 in High Point or (336) 272-9777 in Greensboro to speak to a member of the team today. To learn more about the company’s services, visit them online.