Income Tax Preparation for a Business

Income Tax Preparation for a Business (1)

If you choose to prepare your own financial statements, you will need to gather a long list of items for your tax preparer. The below checklist will assist you in gathering those documents and come well prepared to meet with the tax preparer.

• Profit and loss statement for the tax year
• Balance sheet as of the last day of the tax year
• Balance sheet comparison for last day of tax year vs last day of previous tax year (if available) To easily determine asset acquisitions. For the purpose of retained earnings reconciliation. Verify that no changes have occurred to prior year-end balance sheet after journal entries to adjust for the that year’s tax return have been recorded
• If you are a QuickBooks/Peachtree user, save the general ledger for the entire tax year into a Microsoft Excel spreadsheet or Acrobat Reader (pdf) format and provide the general ledger in an e-mail / save in electronic format and.
• Listing of additions to assets recorded on the balance sheet during tax year with a description of the item, purchase date and amount paid (including financed amount). Please indicate whether items are brand new and do not include items which have been expensed. [Simple definition of an asset: Any item which was purchased (incl sales tax) for approximately $350 or more from which the business will benefit for more than one year must be classified as an asset.]
• Listing of any assets disposed of during tax year – how disposed of and amount sold for
• Bank reconciliation 
• If there has been a change in the ownership structure, please provide names of e.g. new investors with names, addresses, social security number, date of investment and amount for each date
• Additional paid-in-capital per owner, date contributed and amount contributed
• Distributions/draws per owner for the tax year 
• Total miles driven and business miles driven for each business vehicle for which you use actual method. (Form to complete on pg 26. Do not provide data on personal vehicles used for business for which you use the mileage reimbursement method
• Forms W-3, W-2s, 1096, 1099-INT, 1099-DIV issued and received
• Was medical insurance offered to employees (incl owners)? If an S-corporation, what amount was paid in premium for an owner who owns more than 2% of the S-corporation? Was the premium amount added to gross wages on the owner’s W-2?
• Charitable contributions to [501(c)(3)organizations]: Provide cash amount (includes cash, check, credit, debit). Provide non-cash amounts, description of items, dates donated and to which organization. If this is not provided, we will assume that the entire amount was donated in cash
• Provide identification numbers (if you have not provided it before): Federal employer identification number State identification number (not state unemployment insurance ID number)
• Copy of prior two years’ income tax returns 
• Income tax engagement letter, signed and dated

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