What to Gather at Year End for your CPA

hbpicIt is only October, but it is the perfect time to start gathering the documents you will need for year-end tax season.  If you don’t already work with a Certified Public Accountant (CPA), choosing the right accountant for your business is the first step to prepping for tax season. It is important that a business owner take the time to research local firms and then interview each firm or individual candidate.  Check if they have experience in your industry, your size of company, and use software to assist in pulling key reports and analyzing your financial data.

So what will you need to gather for the CPA? If you are working with a professional  bookkeeper this task will be easy since your financial documents will already be in order and ready to hand-off to your CPA. This is one of the advantages to working with Hamilton Bookkeeping, but what do you need if you have not used a bookkeeper and you are now scrambling to gather your documents?

To start with, you will need to provide the CPA your Financial Statements.  If you use QuickBooks software and you are confident that the information you have proper set-up and management of your file, you can easily assess the balance sheet, an income statement and a cash flow statement.  The income statement is the one that the accountant will mostly use. The CPA needs to see the company’s assets and liabilities. If you bought, sold or disposed of any capital assets in the company during the year, you must account for it in your tax return so this is also something you will need to provide.  Again, if you are using accounting software like QuickBooks this should be a simple list to print off. It is always helpful to make notes within QuickBooks or in the system you use as to the details about the capital asset.

Next, most businesses use a Vehicle Log to determine the business mileage. Whether you are using your own car for business or a company vehicle it will require an accurate log of where, when and for what purpose was the mileage used during the year.  The entire log must be presented to the accountant.  If you use a dedicated Home Office for your business, the accountant will be taking a percentage of your utilities, repairs and maintenance, home insurance, and mortgage interest or rent as a deduction so you must keep all of these records to give to the accountant at year-end.  If you are not sure of what can be considered a legitimate office expense it is better to ask your bookkeeper or accountant, but having accurate records is the key to making tax season less stressful. The accountant will also need to know how many rooms in your home or the square footage of your home compared to the space you use for business purposes to calculate the correct percentage to use for the filing.

Finally, you will also need to provide the CPA with your mortgage-interest and property-tax payments throughout the year. This should be a form you receive in the mail called the IRS 1098 Form. There may be other documents in your own personal filing that you will need, but a good tax accountant will send you a list of what to provide them so that it can make the process easier. Some of the accountants we work with like copies of your business bank statements, loan statements, credit card statements, state sales tax filings, and quarterly payroll filings.  If you do have questions or you need help with your bookkeeping or learning how to use QuickBooks software please reach out to Hamilton Bookkeeping at 978-468-1661.