The deadline for business tax returns can sneak up on you, so it's important to keep essential documents organized and ready for review. This is true regardless of whether you make quarterly payments or wait until tax season to file. Here are five documents that your accountant may need for business tax preparation services.

1) Profit and Loss Statement

A profit and loss statement, also called a PDL, is an important document for anyone requesting business tax return preparation. This document showcases the income and expenses of your business each month or quarter, providing a solid basis for determining taxable profits. A profit and loss statement also shows the amount of money that your business spent on rent, payroll, and utilities. This can be helpful if you plan to itemize any deductions on your business tax return.

2) Bank Statements

Bank statements provide proof of income for small businesses. This type of documentation is also necessary when filing for tax deductions on expenses such as travel costs, advertising fees, and office supplies. Your accountant can use this information to help ensure that you receive all the deductions that you are eligible for during business tax preparation and return filing.

3) Receipts

Receipts are must-haves in any business tax preparation process. While many businesses choose to go paperless, your accountant still needs proof of purchases for expenses such as office supplies, travel costs, and advertising fees. Consider digitizing all your business receipts to keep them organized and easily accessible for tax preparation. If you have paper copies, you can scan the receipts and keep them in a shared file on your computer or a cloud-based server.

4) Employee Records

For any independent contractor or employee, you will need to provide a W-2 form at the end of the year when filing taxes. This document includes wage information and social security numbers that are necessary for your business tax return preparation. Ensure that you always keep employee records up to date and organized for easy access.

5) 1099 Forms

If you have paid any independent contractors during the year, you will need to provide them with a 1099 form by January 31st when filing taxes. This document includes personal information, such as a name and address, plus the annual income earned for freelancers and other self-employed workers.

By having these five documents organized and readily available, you should be able to file your business taxes with ease. Consider using a filing system or other type of organizational tool to ensure that all the documents needed for business tax return preparation are easily accessible when needed.

For more information, contact accountants such as Martinson & Carter CPAs, PA.

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