The Ultimate Tax Prep Checklist
I’ve talked to a few people this week who were getting everything together to get their taxes done and didn’t know what all was needed to give to their CPA. They were starting out with a pile of receipts and their bank statements. Now, I preach that a Money Maven knows her numbers every single month, and does not wait until tax deadline to figure it all out! But if you still are not ready for tax time, it's ready to get moving.
Here is a quick list of what your CPA will need to do your business taxes. Pull all this information together and you will make your tax prep easier and probably a bit cheaper.
If you have a new CPA, bring along a copy of your last year's return. That will have a ton of information to help them get started. Here is what to get together:
Your EIN number - this is the number that you got from the IRS when you registered your business. If you need to file a State return, also get your state registration number.
Your business entity type - your CPA needs to know what forms to use, so are you a Sole-Proprietor, an LLC, or an S-corp.?
If you have your books in some accounting software, print out the Profit Loss Statement and Balance Sheet. Review the numbers to make sure they are accurate.
If you don’t use any accounting software, use your bank statements or other records to tally up your income. Gather all your income numbers and add them together. Include any 1099s you've received from clients.
Add up all the expenses you have for your business. This is any money you spent to operate your business. Make sure you have receipts to back up each expense. These are all the expenses you paid to run your business, so all supplies, team members, bank fees, fees for Paypal or other payment service, advertising and Facebook ad charges, telephone, internet, software or apps you use, meals and travel, and any coaching, books, or programs you bought to help you in your business. Did you buy a new printer or computer? Or go to networking events? How about your obsession with styling your office to match your brand for video’s, yes, all that decor is deductible.
The miles that you drove your car for your business. Your CPA will need your total miles driven and how many miles were driven for your business. This should be tracked throughout the year in writing, or use an app like MileIQ.
Do you have a home office? Gather all the expenses for your house, and how much space is being used for your office. You'll need total square feet of your house, and the square footage of your office.
Get your Health Insurance information and forms together. If you received any tax document from your insurance provider, include those. Let you CPA know how many months you were covered by health insurance
How much did you pay the IRS for estimated payments throughout the year? If you didn’t make any payments and you owe taxes, you will have a small penalty. If you do owe taxes, have a plan in place to pay them. They will need to be paid in full when you file your return or you will need to set up an installment plan to pay them over time.
Add in any personal tax documents and supporting information your CPA will ask for., all depending on your personal situation.
This all can be a tedious process. But, if you are a true Money Maven, you have all the information already together, use accounting software to track your business money throughout the year, or you have hired someone on your team to do it for you.
If you are truly a DIYer and are totally confident in understand your business financials and want to tackle doing your taxes yourself, there is a variety of options for you for tax preparation software. I found this great resource on the Best Tax Online Tax Prep Software for 2020 put together by Money.com. This is save you the hassle of researching different products on your own.
Tax time is never fun, and sometimes there are lots of tears. It can be frustrating to tackle this part of your business when it’s something you’ve put off or you plain old don’t like to do. Or you were not tracking how much tax you may have to pay, and you end up owing more tax than you could even imagine.
This is also a good time to reflect on how you can do better this year. I’d love to help you get on top of your business money and become a Money Maven! Let's chat on how we can work together to make a plan for you to master your business money. Book your call HERE
To your Success,
Jenn
xoxo
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