Small Business Taxes: What Information Does My Accountant Need?

What Information to Bring Accountant for Small Business Taxes

Preparing small business taxes by yourself can be daunting, so hiring an accountant or tax expert is a great way to save time and create peace of mind this tax season. However, you don’t want to show up to your tax appoinment empty handed. Accountants expect you to bring certain documents and be prepared with the information that is needed to complete your tax return.

In this post, we’ll talk about the specific information an accountant needs in order to file your small business taxes. We’ll also provide expert tips and tricks along the way to help make this the easiest tax season yet.

Personal Information

First things first. You will need to furnish your accountant with basic personal information including your legal name, current address, and social security number. The easiest way to provide this information is to bring your social security card to your tax appointment.

If you have an Employer Identification Number (EIN), you will need to provide it, along with your legal business name.

Previous Year’s Tax Return

Make sure to come with your previous year’s tax return. This 1) helps them get a better understanding of your business and 2) gives quick information about the deductions your company has (or hasn’t) been taking.

Financial Business Reports

Your accountant will need copies of your basic financial reports. These include:

  • Profit and Loss Report (or the Income Statement)
  • Balance Sheet
  • Statement of Cash flows

The profit and loss report shows your business’s overall profit ( or loss) for the year, while the balance sheet displays your company’s assets and liabilities. The statement of cash flows shows all transactions affecting your business’s cash account.

Jessica Kent, of the Houston Chronicle, suggests bringing copies of your general ledger and trial balance report as well.

You should be able to print these basic financial reports from nearly any accounting software program, though report availability varies from software to software. Contact your accountant or tax preparer to see if there are any additional reports they might require or find helpful.

Tax Forms

The tax forms your business is required to fill out depends entirely on your business type. These are the forms that may be required for your business:

  • Freelancers and Sole Proprietors: 1040, Schedule C, Schedule C-EZ, 1040-SE
  • Partnerships: 1065, 940, 941, 943
  • S Corporations: 1120-S, Schedule K-1, 940, 941, 943
  • Limited Liability Corporations (LLCs): 1065, 1120-S, Schedule K
  • Single Member Limited Liability Corporations (LLCs): 1040, Schedule C, Schedule E, Schedule F

To be certain about which forms your company is required to file, visit the IRS’s Forms and Instructions for Filing and Paying Business Taxes page. Here you will find specific forms and instructions for each business type. Bring the necessary forms to your accountant in order to file your tax return.

Note that your tax filing date may be affected by your business type. Read Entrepreneur’s First Time Business Owners: A Brief Guide to Tax Filings to learn more about when your business’s taxes are due.

Asset Infomation

Your accountant will need to know about any assets you’ve bought, sold, or depreciated during the last year. Bring any receipts, documents, or reports related to your assets and fixed assets.

Tip: Some accounting programs have fixed asset reports or fixed asset listing that you can run.

Loan Information

You’ll also need information on your business’s loans. If you’ve acquired a new loan in the last year, bring the loan agreement with you. Also, bring records of any loan payments and/or accrued interest. This will ensure that your accountant is up to date on your company’s total assets and liabilities.

Income Records

To verify the income amount on your profit and loss statement, you will need to provide your accountant with income records. According to Kent:

An accountant may request copies of bank statements, deposit slips or sales invoices.

Be sure to have these records available.

Expense Records

In order for your accountant to verify your company’s expenses and find you the correct deductions, you’ll need to bring several types of expense records as well, including:

  • Receipts
  • Bills
  • Bank statements
  • Credit card statements
  • 1098 Mortgage Interest and Property Taxes form

Be sure to keep these expense record, especially your companies business receipts, well-organized. Not only will your accountant thank you for not handing them a shoebox of receipts, your wallet will thank you too.

What Information to Bring Accountant for Small Business TaxesThe more time your accountant has to spend on your tax return, the more money you pay, so make everything as seamless and easy for them as possible.

Deductible Expense Information

Some business expenses require more than just receipts. So if you’re planning on claiming any of the following deductions, make sure you bring the proper information to your accountant:

  • Home Office Deduction: If you have a separate home office that is used exclusively for business, you may be eligible for the home office deduction. The home office deduction is heavily scrutinized by the IRS. For this reason, make sure you have the proper documentation. The popular credit card processing company Square suggests:

If you have a home office, be sure to take along information related to it. This includes the square footage of your home and the office. In addition, give your accountant the amounts you paid for your mortgage or rent, insurance and utilities, and any repairs you made to your home office.

  • Mileage Log: If you use your vehicle for business purchases, you also may be eligible for a vehicle deduction. Be sure to track all of your mileage throughout the year and bring this log to your accountant or tax professional, along with any receipts related to car expenses. Learn more about how the vehicle deduction is calculated.
  • Travel: Businesses can write off meals, travel, and entertainment expenses. This deduction also can be a red flag for an IRS audit depending whether expenses appear “lavish or extravagant.” For this reason, be sure to bring all receipts and any travel tickets or itineraries to your tax appointment.
  • Donations: If your company makes charitable donations, be sure to bring all documents related to your donations, including receipts and any statements you may receive.

Payroll Data

Your accountant or tax professional will also need your payroll data from the year. Bring copies of your employees W-2s, W-3s, and 1099-MISCs. Also gather health insurance records (as these can count as a business deduction) and any information regarding bonuses.

Inventory Total

Several tax forms require a COGS (Cost of Goods Sold) closing balance for the year. You should already have taken an opening balance of your inventory at the beginning of 2017. Now do another inventory count and bring the results to your accountant so they can properly fill out your tax return.


Bring information related to all stocks and bonds your business has attained or sold during the year. You’ll also need a record of any owner’s investments made into or withdrawn from the company during the year. Square says:

As the owner of a sole proprietorship or LLC, you probably pay yourself by making withdrawals from the business. Your accountant will want to know about these withdrawals made to you personally, plus any information on any investments made by you.

Contact your accountant directly before your tax appointment to see if there is any other information they require.

Final Tax Tips

In addition to having all of your documents ready to go, there are a few other things you can do to be prepared for tax season.

Communicate With Your Accountant

On their blog, Square suggests that talking to your accountant is the key to a successful tax appointment:

…accountants may have a checklist of what they need. When you call to make your appointment, be sure to ask for this checklist.

Start Early

Geoff Williams, in the article 7 Things Tax Preparers Wish We Would Do, says being timely is imperative:

Get your paperwork to your tax preparer early…February is fantastic. March, especially the first half, is fine. But…if you give your material to your tax preparer on April 1, don’t be upset if you end up having to file an extension.

Be Prepared

The popular invoicing software FreshBooks recommends staying on top of your accounting processes:

Keeping proper accounting records throughout the year can make it a lot easier to prepare your return at tax time.

In her article How To Prepare Records for Your Accountant, Susan Ward reminds businesses that being unprepared can cost you, literally:

Accountants are paid by the hour, so the harder you make their job, the more it will cost you.

Stay Organized

One of the biggest ways you can save your business money is by being organized. Having all of your tax information together only goes so far. You accountant or tax preparer needs to be able to find and understand your records with ease. Organizing your business information can make or break a tax appointment.

Final Thoughts

Taking the extra time to gather and organize the proper tax information will help make the tax return process a breeze. If you want to learn how your accounting software can make this process even easier, read How Your Business Accounting Software Can Help You File 2018 Taxes or download our free 2018 Tax Prep Checklist. As always, good luck and happy filing!

The post Small Business Taxes: What Information Does My Accountant Need? appeared first on Merchant Maverick.



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