Tax season can be a time of high anxiety caused by uncertainty. As a marketing and content professional (and not a CPA), when it comes to our personal taxes I go into super organization mode, putting together every tax document we get in the mail, any donation receipts, all estimated tax payments I’ve made as a self-employed contractor and color code with tabs… the whole bit.


Having a tax preparer can make this time a little less stressful, but you still may be worrying: What do I need? When do they need it? When will I know how much we are getting back… or how much do we owe?  It’s time to clear up some of these questions. Sitting down with one of our CPAs here, we discussed what can make tax season go more smoothly.


March is only a few short weeks away, and the deadline to file taxes if you’re a partnership or S Corporation is March 15th. Corporations and individuals have until April 15th to file, but both of these deadlines sneak up faster than we’d care to admit.

Keeping track of income and expenses, sending 1099s to contractors, and monitoring tax credits that may apply to your business can be overwhelming, especially for those of you who maintain your own records. To help you out, here’s a list of things your CPA needs to make sure your taxes are filed accurately and on time.


General Business Information


Your CPA or tax preparer needs all the particulars for your business, including your name, business name (if you have a DBA), tax ID number or Social Security number, Employer Identification Number (if you have one), and business address and phone number.


Financial Statements


Send your CPA a copy of your balance sheet, an income statement and a cash flow statement (if they don’t have this available already).

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Regular Expenses


Many business expenses are tax-deductible, so it’s important to keep track of them! Your accountant needs documentation regarding all expenses, which is easy to provide if you’re using a financial software such as QuickBooks. Not sure if an expense is deductible? Go ahead and provide the information to your accountant. Keep track of expense receipts, in case you need them later.


Capital Asset Purchases and Sales


Capital assets are items intended to be used by the business for more than one year and not designated for sale or inventory purposes. If you acquired or disposed of any capital assets this year, provide a list to your CPA. Include the item, the action that was taken, and the transaction price (if applicable). Capital assets can include real estate, vehicles, manufacturing equipment, and other items used in your business.

Payroll Records

If your business has employees, wages are probably one of your biggest expenses. Your accountant needs all payroll information, including gross wages, taxes paid by the business, and any other benefits you paid to employees during the tax year. If you are looking for help with your payroll, ADP is a great resource and has solutions that are affordable for small to medium sized businesses. Going through a payroll company like ADP can also help eliminate risk of miscalculations and any penalties that can accompany payroll errors.

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Payments and 1099s to Contractors


If you outsourced work to a contractor last year and paid more than $600 to that individual, you should have provided a 1099 to that contractor. Your tax preparer will need information about all issued 1099s, as well as how much you paid to contractors who didn’t reach the $600 threshold and didn’t require a 1099.


Prior Year Tax Return


Usually, your CPA would prefer to see your prior year tax return to ensure everything is being captured correctly. There can be items like carry overs or elections that a CPA will be on the lookout for and could affect your current tax situation. Carry overs can be a net operating loss, credit, or capital loss that occurred in prior year, but due to limitations, you couldn’t use them. These are carried over for deduction purposes. When it comes to elections, a CPA will be looking at whether you are cash or accrual. Your CPA needs to know how you have been filing in the past to accurately file for the current year.


The Sooner the Better (Plus a Note About Security)


Each accounting professional and firm will have their own deadlines that (hopefully) are communicated clearly to you as a client. The answer here though is as soon as possible. By forwarding all of this information as soon as you receive it, you’re making your tax preparer’s job much easier and the entire process should be less stressful if you aren’t racing the clock.


Another topic worth noting is security. If you’re working with a virtual CPA firm, ensure you aren’t emailing documents with sensitive information. We utilize a Secure Client Portal with bank-level encryption and every firm will have their own set of systems. The important thing for you to understand is that information like SSNs should never be emailed because this is not a secure form of communication and it could be intercepted. Tax time brings a new scam every year, so stay vigilant and remember the IRS will never call you demanding payment.


Make Tax Time Easier

A large part of tax preparation takes place before the year wraps up. Actively participating in tax planning and having a reliable advisor is HUGE for your business. By working with a knowledgeable CPA, you can devise a plan at the beginning of the year and have regular check-ins to help make decisions strategically, rather than simply reacting when it’s time to file taxes. Finding an accounting firm who can elevate the regular compliance services to focus on your goals and helping you achieve them can really make the difference between surviving and thriving as a business owner.

Keeping a pulse on this throughout the year can eliminate much of the uncertainty that can accompany filing taxes. Less stress, more control and strategic decision-making rather than crossing your fingers and hoping it all turns out while you pray to the tax gods.

Another thing to consider is that although having this higher level advisor may cost more in the short-term, you could be looking at tens of thousands of dollars in tax liability savings, hours of time you could gain back by finding efficiencies and other benefits that a lower cost bookkeeper is not going to give you. It depends on what you are looking to do as a business owner and the 3-, 5- and 10-year goals you’ve made for yourself personally and professionally.

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