February 6, 2017 by Ed Becker
Tax season seems to pop right up nearly as soon as the holiday season ends. If you have stayed on top of your bookkeeping, and kept everything current, then tax season is not such a stressful time. If things have lagged behind, it is time to get it all in order for your accountant. By now, if you follow the calendar year, all your books should be closed out for 2016. It is just a matter of getting information together in an orderly fashion. This checklist, of sorts, should help you gather it all up in a short amount of time.
Yes, your accountant may have all your personal information, but it is a good practice to include this anyway, to save the hassle of looking up details. Also, if any information has changed, like current address or you got married, etc., make sure to note this so your accountant can update his records.
This includes your receipts and documents of expenses, whether or not they are deductible expenses, they have to be accounted for. Ensure that all your receipts and documents have all pertinent information, in order to be properly categorized. Some expenses that need proper documentation are office supplies, professional services, meals, and entertainment.
Financial Statements/Bookkeeping Records
This includes journal entries, Profit & Loss Statement, and Statement of Assets. These are necessary for your accountant to prepare your return. It is also wise to ask your accountant if they need any other specific documents.
Home Office Deduction Information
This is a very large deduction, if you use part of your home for business. You will need to have the details of your office space in square feet as well as the total square footage of your home. This deduction also allows you to deduct part of your housing expenses that relate to your home office space. This is another item that should be clarified with your accountant as to exactly what they need.
If you have employees or freelancers, you will need a report or copies of W2s/1099s in order to properly document wages, and ensure that your employer taxes are correct.
If you use your vehicle(s) for business, the vehicle deduction is very beneficial. Depending on which way you calculate it, you will need different items to support the deduction. Either a driving log with your mileage, personal and business or all of your documentation of operating expenses for the vehicle, these are added and divided by the percentage of what was used for business. Typically, the mileage deduction is used because it is much simpler. Your accountant will see which method gives you a better deduction.
Assets-purchased or sold
Any purchased or sold assets have documentation that will be necessary for depreciation, deductions, expenses or income to support your return properly.
This also includes capital assets that were purchased or sold. You can print your capital asset activity from your bookkeeping software to include this information for your accountant.
Form 1098-Mortgage Interest & Property Taxes
If you have a mortgage, the company will have issued you a form 1098, it summarizes the mortgage interest and your property taxes. This is necessary for the mortgage interest deduction as well as for the home office deduction information. If you have more than one mortgage, ensure that you collect the form for each one.
This list is not all-inclusive, but it is a good indication of the documents and reports your accountant will need in order to prepare and file your tax return. Please note, you should speak with your own accountant for a full list.