Do you ever feel like tax time comes around and finds you scrambling to remember what you need to gather so that your accountant can file your business taxes? At Bayou Bookkeeping & Tax Services, we understand. Therefore, we’ve compiled a list of all the final documents for your business tax return. Fortunately, these items apply no matter your business structure.
1. Employee and 1099 Records
Employers must produce a W-2 form for each company employee; this form reports the amount of compensation each received and the taxes paid for the filing year. First, you need to file this form for each employee you have or have had during the year. Next, provide a copy to your accountant, another copy to your employee(s), and keep one for your internal records. Additionally, two other forms (940 and 941) might be necessary if you withheld taxes from employee payroll. Finally, each contractor who earned more than $600 during the year requires a 1099 form.
2. Trial Balance
The trial balance summarizes all of the business’s transactions from the previous year. It is organized by account type and is part of the bookkeeping process. Thus, it is critical that the entries and balance are correct.
3. Income StatementThe income statement should include the entire reporting period and include all revenue and expenses. Further, a copy of your Cost of Goods Sold should also be included. Typically, if you use a bookkeeping service, they should have these records. The records are important because the numbers contained in the income statement and cost of goods sold are reflected on the following tax forms:
- Form 1065
- Form 1120 or 1120S
- Schedule C
4. Previous Year’s Tax Returns
In addition to basic information, such as your personal name, date of birth, and social security number, your previous tax returns include important information about your business. Your accountant needs to know your Employer Identification Number, the previous year’s adjusted gross income, your IRS password, the amount of all payroll taxes paid, and any quarterly tax payments made.
5. Supporting Documentation for All Deductions
The number and amount of deductions available to businesses vary from entity to entity. Your accountant will work with you to determine your deduction eligibility and what records are required as proof. The following records may be necessary depending on what deductions your accountant deems appropriate.
- Mileage Records
- Other Expenses (Utility, Travel, Medical, Moving, etc. )
- Business-Related Bank Statements
- Business-Related Credit Card Statements
- Legal and Professional Fees
- Charitable Donations
- Ongoing Education and Professional Development Expenses
- Money Spent on Property Toward Energy Efficiency
- Vehicle Payments, Fees, and Taxes
- Documents on Assets, Depreciation, etc.
The items captured here are necessary for your accountant to file your business tax return. You may need additional documentation depending on your business entity type, but the information listed above includes the main final documents for your business tax return. Once you have these basics together, call Bayou Bookkeeping in Baton Rouge at (225) 442-1137 to schedule a time to drop off your records. Your accountant will let you know if anything else is needed. Happy filing!