How Can a Business Tax Accountant Help You? Running a business in a modern country shouldn’t be challenging or troublesome. However, troubles come when you need to file taxes and deal with accounting issues. This explains why help from a business tax accountant sounds interesting.
Dealing with accounting issues when filing business taxes sound boring and tiring. Despite the fact, this task should be done right if your business wants to run properly. Some tasks are setting up accounting procedures, managing business’ money, and keeping your books.
All the details can be managed professionally by your tax accountant. If you ever wonder what information the accountant needs to prepare when filing your business tax return, this article will cover some parts of it.
Information Needed to Prepare Business Tax Return
The easiest way to prepare a business tax return is by hiring a professional like a tax accountant. This service helps you to simplify the taxes by learning the information and tax forms needed to file them.
1. Personal information
The most important thing to prepare is none other than your basic personal information. These include your legal name, social security number, address, and many others. You only need to give your social security card to the business tax accountant so that he can bring it to the tax appointment.
As an alternative, you can provide an employer identification number. Don’t forget to include your legal business name in it.
2. Information related to stock and bond
The tax accountant also needs to access information regarding your business stock and bond that you bought or sold during the year. Make sure that you also provide him with records of the owner’s investments withdrawn from or made into the company during the current year.
3. Last year’s tax return
When filing a business tax return, you need to come with your last year’s tax return. Why is that? It helps the accountant to get a thorough understanding of your business. This also provides flash information regarding the reductions applied to your company.
4. Information about business asset
Your business tax accountant needs access to your business asset information. These include assets that you sold, bought, or depreciated during the previous year. You only need to provide him with documents, reports, or receipts related to those assets.
5. Information about business loan
This one is also compulsory. If you got a new loan for your business in the previous year, you should provide the loan agreement to your tax accountant. These include records of accrued interest and loan payments.
6. Annual financial business reports
You need to provide your tax account with copies of business financial reports for the year. The list includes income statement, cash flows statement, balance sheet, overall profit for the year, and many others.
For peace of mind, you only need to talk to your business tax accountant to see if there are extra reports they need to file your business tax return.
7. Income records
This information is vital as you need to verify the amount of income on your business profit and loss statement. Simply provide the tax accountant with income records, so he can handle the rest.
8. Records of business expense
Your tax accountant also needs information related to your business’ expenses. This way, he can find the right deductions when filing the tax return later. The expense records include bills, receipts, credit card statements, bank statements, and many more.
9. Payroll data
A tax accountant also needs to acquire information regarding your business’ payroll data from the current year. That means you should provide him with your employee’s 1099-MISCs, W-3s, and W-2s. These include any information related to bonuses.
To simplify the preparation, you can use payroll software that is available in the market. The price is cheap, you won’t spend too much money on it.
10. The total opening and ending inventory for the year
This one is optional because not all forms require the cost of goods sold closing balance for the year. When preparing the information, you should have taken the inventory opening balance of the year.
11. Information related to all deductible expense
If you are planning on claiming most of the business expenses deductions, you should provide more than just receipts. Bring more proper required information to the business tax accountant.
Some business expenses require more than just receipts. Make sure to provide proper information, records, and date to your accountant if you want to claim any business expenses deductions and file the tax return.
Hiring a Tax Accountant for Your Business
What has been mentioned above are the examples of information and paperwork that you need to provide to your tax accountant when filing the tax return. The help from a professional can make the document preparation less daunting. It saves time and eradicates hassles.
The problem is some of you don’t even know how to choose or hire an accountant. To simplify the effort, you can compare them based on the type of functionality. So, what are the options?
These people are usually called certified public accountants. As the name suggests, these accounting professionals have passed the CPA Examination and obeyed the CPA requirements. They offer various services, including tax filing and preparation either for personal or business purposes.
This one is also called the enrolled agent. This consists of a group of business tax accountants and professionals who get the license from the IRS. They have passed a special examination that qualifies their tax knowledge and proficiency. As an alternative, they have worked at the IRS for at least 5 years.
Another common type of tax accountant that you can hire for your business is called an attorney. They are experts in law and have passed the bar exam. Not to mention they got their practice license from the state.
As a business owner, you only need to pick an attorney who is exceptional in business taxes.
If your business needs to hire a tax advisor or expert, make sure that you find a service that fulfills the qualifications. The three categories above are recommended enough
In technical terms, everyone can be a business tax accountant as long as they have passed the exams and get a legal practice license. Thorough knowledge is not enough, as this service should prove its eligibility.