Tax preparation can be confusing and frustrating, even for experienced business owners. While a skilled accountant can take most of the burden off your shoulders, keeping track of your documents throughout the year will help avoid last-minute issues and stress when tax season rolls around. Here’s a closer look at the key documents your tax professional will need to get started.
4 Items You’ll Need to Prepare Your Taxes
1. Financial Statements
A detailed profit-and-loss statement gives your accountant most of the information they’ll need to calculate your income tax burden, but they might need additional documentation as well. Before your appointment, they may also ask you to prepare an income statement and balance sheet, which provide a clearer picture of your business’s assets and liabilities.
2. Asset Activity Records
Buying, selling, trading, or disposing of business assets can have a dramatic impact on your tax liability. Before starting your tax preparation, gather all the invoices, receipts, and other documents that show how much you made or invested in those transactions.
3. 1099 Forms
While the income reported on 1099-MISC or 1099-K forms should be included in your profit-loss statement, your accountant may want to review those records for accuracy. Failing to report 1099 on your tax returns can trigger an audit, which can be time-confusing and stressful.
4. Vehicle Use Logs
Many small business owners use their personal vehicles to deliver products, meet with clients, or pick up supplies. The IRS allows you to deduct the mileage on your vehicle as well as tolls and fuel costs, which can dramatically lower your tax burden. Keep track of your personal vehicle use throughout the year so your tax preparation professional can maximize the value of your deductions.
For 22 years, Charlotte Metro Area business owners have relied on US Tax Express to take the stress and uncertainty out of their tax preparation. Their team prides itself on providing year-round tax planning and support, saving money you can put back into your business. Visit their website for more on their wide range of services and call (704) 817-9517 to make an appointment.