Even though it’s late for those of you who aren’t filing for a tax extension, the fact of the matter is that when it’s time for your accountant to do your taxes, there are things you’re going to want to have ready to give him or her so they can do their job properly. Listed below are the 5 most critical things they’re going to need, though not necessarily in this order.
Mileage – Even if you use your vehicle for personal reasons as well, keeping track of your business mileage is very important because it will offer legitimate deductions that will help bring your tax bill down. If there are places you go all the time you should have an estimated mileage count for that, and then you just have to totally track your mileage for anything outside of that. You only get to count what you don’t get paid back for expenses. And if you used a rental car, you don’t get to claim mileage.
Receipts – Anything that’s somewhat business related, you need to make sure you keep your receipts for it. This includes business meals, stamps, any supplies you might use for business, buying a new smartphone, etc. If you need to you can write little notes on them; for instance, I write little notes on all my receipts for business meals in case anyone wanted to track who I was meeting for business purposes.
Bank Statements – Hopefully you have a bank account that’s specific for your business, which is easy to use. For my purposes, I also give my accountant my personal account statements, just in case they see something that pops out that they can use. Your bank statements will show any payments you got for the year, as well as some of your business expenses. You’ll probably need to go through your payments and expenses and highlight where some of the money came from if you earned it in different ways so they can categorize it for you.
Any statements showing estimated tax payments – I bring this one up because if you’re like me, you don’t always pay your estimated taxes from your bank account. I paid some of mine with a credit card, and thus I had to go back and retrieve those statements online to give to my accountant for my records.
Any pertinent W-2′s or 1099′s – Truthfully, your accountants can do your taxes if you don’t have these statements by using your business bank account information, but any of these you have makes it easier for them. The times I didn’t use them was when they either came late or were incorrect.
