business tax preparation checklist

From hiring the right employees to overseeing the daily operations of your company, it can be challenging to find the time to manage your books. Many tax preparers create client organizers to help ensure business tax preparation checklist their clients are fully prepared for their tax appointments. Asking for a client organizer or other guidance from your tax preparer can prevent many headaches as you prepare for your tax appointment.

  • Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to SE tax, as they are considered U.S. residents for SE tax purposes.
  • If you’re self-employed or earn a lot of money that doesn’t have federal and state income tax withheld, you may have to make estimated tax payments.
  • For more information about ordinary and capital gains and losses, see chapters 2 and 3 of Pub.
  • Print out the report and take it to your tax preparer, along with your vehicle mileage at the beginning and the end of the tax year.
  • If you use your personal vehicle for business, deducting the standard mileage rate on your tax return is usually more beneficial than deducting your actual vehicle expenses for the year.

As with other taxpayers, the IRS is eager to collect tax payments, so they’re often willing to work with small business owners to find a solution. Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results. You can deduct 100% of the cost of providing meals to employees, such as paying for pizza when your staff is working late. Meals provided at office parties and picnics are also deductible to the extent of 100%.

Small Business Tax Preparation Checklist for Accountants

You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Inventory valuation rules cannot be the same for all kinds of businesses. The method you use to value your inventory must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. Your inventory practices must be consistent from year to year.

This is how you establish yourself as a known small business tax preparation expert in your service area. Income and expense records are the basis of your tax return. Depending on your level of gross receipts and assets, you may need balance sheet information as well. One last thing to note is to make sure that you keep all of your receipts and records to be able to back up these deductions in the event of an audit.

(For Individuals Who Use Schedule C)

A loss from one business reduces your profit from another business. For details about not-for-profit activities, see chapter 1 of Pub. That chapter explains how to determine whether your activity is carried on to make a profit and how to figure the amount of loss you can deduct. You may be entitled to a credit or refund for federal excise tax you paid on fuels used for certain purposes. You can deduct on Schedule C any tax imposed by a state or local government on personal property used in your business. You can deduct on Schedule C various federal, state, local, and foreign taxes directly attributable to your business.

business tax preparation checklist

You can use features such as receipt scanning and auto-syncing of transactions from your bank account to easily and accurately record income and expenses. These records can then be used when filing your tax return. Take a look at our picks for the best accounting software for small businesses, so you can be prepared for the next tax season. You must report on your tax return all income you receive from your business unless it is excluded by law. In most cases, your business income will be in the form of cash, checks, and credit card charges. But business income can be in other forms, such as property or services.

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This section describes the help the IRS and other federal agencies offer to taxpayers who operate their own businesses. If you were due a refund but you did not file a return, you must file a refund claim within 2 years from the time the tax was paid to get that refund. The law generally provides for interest on your refund if it is not paid within 45 days of the date you filed your return or claim for refund.

  • Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction.
  • Income you report on Schedule C may be qualified business income and entitle you to a deduction on Form 1040 or 1040-SR, line 13.
  • If you file late, you may have to pay penalties and interest.
  • You can deduct on Schedule C various federal, state, local, and foreign taxes directly attributable to your business.
  • With a membership, you can access hundreds of customizable legal documents, attorney services, a proprietary document signing tool and discounts on professional services like tax filing and business incorporation.

This will help her determine how much depreciation can be recorded in the tax year or whether the asset qualifies for Section 179. Your tax preparer may also want to retain a copy of the receipt or other purchase documentation in their work papers. Opening a business bank account provides you with additional legal and tax protection by keeping your business and personal bank accounts separate.


Go to to get more information about the tax consequences of participating in the gig economy. If you elected to defer self-employed tax payments from 2020, see How self-employed individuals and household employers repay deferred Social Security tax. For 2023, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 65.5 cents per mile.

  • Without carefully reviewing the data, you could end up forgoing a more advantageous tax filing status.
  • Make sure to have this information on hand when filling out your tax forms or written down for your accountant or tax professional if you’ve hired one to file your tax return.
  • For more information, see When To File in the form instructions.
  • She cannot use the nonfarm optional method because her net profit is not less than 72.189% of her gross income.
  • Get prepared with our tax checklist or answer a few questions to quickly create a customized tax checklist of your own.

Or you can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you have to pay a penalty and to figure the penalty amount. To face your business taxes with total confidence, rely on virtual bookkeeping services like QuickBooks Live, a comprehensive digital bookkeeping experience that makes reporting and filing taxes a breeze. A customized setup helps you personalize your experience and guides you through connecting to your bank.