What Your Tax Preparer Needs to Calculate Your Business Taxes

If you love to hate taxes, maybe it will help to think about it this way:  Taxes impact all of us and fund our community structure.  Without taxes, we could not fund our roadways, our government, nor services like firefighters and police.  No roads means no product delivery and no customers. No police means security for your business would be 100 percent on you.  You get the idea.  Taxes lend stability to our lives, and we have to pay them.  How much you pay and how painful it is to file your business tax returns is impacted by how knowledgable your tax professional is.

Businesstaxprep.org can connect you to an experienced tax professional who can answer your tax questions.  Here are some tips when delivering your tax documents to your tax preparer.

Love to Hate Taxes: But Get All Documents to Your Preparer

Organize your tax documents and prepare to turn them over to your tax preparer or go online to the IRS free tax submission apps.  In general, you will need to provide your personal information, your income from all sources (1099 and W-2 income, and records for all income not on 1099s) and your qualifying expenses.

Personal Information

  • Have your social security number or business tax ID number
  • Have your spouses social security number.
  • Direct deposit information if you are likely to get a refund/ method of payment if you owe federal tax money.

All sources of Income:  (Keep in mind, not every form on this list will be applicable to your business.  Consult with your tax preparer for exact list of needed documents.)

  • W-2 form(s)
  • 1099 form(s) (contractor income, unemployment income, foreclosure debt forgiveness, sales of investments, canceled debt, state tax refunds etc)
  • Schedules K-1, income records for income not on 1099s
  • Records ofall expenses – not just a shoebox of receipts – list yur expenses, and attach check registers and/or credit card statements.  Scanned copies are often preferred for this.
  • Business use asset information (cost, date placed in service, etc.) for depreciation
  • In home office information such as dimensions, phone, electric and internet expenses if used for work only.  What percent if used for both personal and work purposes.
  • Record of estimated tax payments made
  • Rental income and expenses
  • Rental asset information (cost, date placedin service, etc.) for depreciation
  • Record of estimated tax payments made

Qualifying Expenses:

  • Medical and Dental Expenses
  • Mortgage expense statement
  • Home improvement receipts (such as windows, doors, roof, etc.)
  • Receipts for taxes paid throughout year. (Real estate, estimated income tax,etc)
  • Charitable contribuation letters and receipts
  • Casualty and theft losses-damage amounts and insurance reimbursements
  • Proof of business related expenses. (receipts, invoices, medical bills, charitable contribuations, IRA contributions, hiring expenses, mileager logs, education expenses, and more.) if you have too much documentation, your accountant can exclude what isnt needed.  If you don’t have enough documentation, your taxes may be delayed.