A crucial part of the tax preparation checklist!

• Business name and address: Ensure your business name and address are up-to-date and accurate on all tax documents.
• Employer Identification Number (EIN): Your EIN is essential for tax identification purposes and should be included on all tax forms.
• Legal structure: Specify whether your business is a sole proprietorship, partnership, corporation, or LLC.
• Fiscal year end: Indicate the end date of your business’s fiscal year, which may differ from the calendar year.
• Business activity: Describe the primary activities or services your business provides.
• Contact information: Include phone numbers, email addresses, and other relevant contact details.
• Industry code: Use the appropriate industry code to classify your business for tax reporting purposes.
• State registration: Provide any state-specific registration numbers or documentation required for tax filing in your jurisdiction.
• Business bank account details: Provide information about your business bank accounts, including account numbers and financial institution names.
• Ownership details: If applicable, include information about business owners, partners, or shareholders, including names, addresses, and ownership percentages.

Income records needed for tax documents:

• Profit and Loss Statement (P&L): Also known as an income statement, this document summarizes your business’s revenues and expenses for the year.
• Sales records: Detailed records of all sales transactions, including invoices, receipts, and sales reports.
• 1099 Forms: If you paid independent contractors or freelancers more than $600 during the tax year, you’ll need to provide them with a Form 1099.
• Gross receipts: Records of all income received by your business, including cash, checks, credit card transactions, and electronic payments.
• Bank deposit records: Documentation of all deposits made into your business bank accounts, including the source and amount of each deposit.
• Accounts receivable aging report: A report that details outstanding customer invoices and the length of time they have been outstanding. This helps track income that has been earned but not yet received.
• Interest income: Documentation of any interest earned on business bank accounts, loans, or investments.
• Dividend income: Documentation of any dividends received from investments in stocks or mutual funds.
• Royalty income: Documentation of any royalties earned from the use of intellectual property, such as patents, copyrights, or trademarks.
• Commissions: Records of any commissions earned from sales or referrals.
• Barter income: Documentation of income received from bartering goods or services with another business.
• Foreign income: Documentation of any income earned from foreign sources, including sales, investments, or royalties.

• Receipts: Keep receipts for all business-related expenses, including office supplies, utilities, rent, and travel expenses.
• Payroll records: Documentation of employee wages, benefits, and payroll taxes.
• Asset purchases: Records of purchases for assets such as equipment, vehicles, or property.

• Form W-2: For reporting employee wages and tax withholdings.
• Form 941: Quarterly payroll tax return for employers.
• Form 940: Annual Federal Unemployment Tax Act (FUTA) return.
• State and Local Tax Forms: Depending on your location, you may need to file additional tax forms at the state or local level.
• Form 943: This form is used by agricultural employers to report wages and taxes for farm workers.
• Form 944: Eligible small employers may use this form to file their annual federal tax return instead of Form 941 if they have an annual liability of $1,000 or less for social security, Medicare, and withheld federal income taxes.
• Form 945: This form is used to report withheld federal income tax from non-payroll payments, such as pensions, annuities, and gambling winnings.
• Form 990: Non-profit organizations must file this form to provide the IRS with information on their finances, governance, and activities.
• Form 1120: Corporations use this form to report their income, deductions, gains, losses, credits, and to figure their income tax liability.
• Form 1120S: S corporations use this form to report their income, deductions, gains, losses, credits, and to figure their income tax liability.
• Form 1065: Partnerships use this form to report their income, deductions, gains, losses, credits, and to figure their income tax liability.
• Form 2553: This form is used by eligible small business corporations to elect S corporation status.
• Form 7004: Businesses use this form to request an automatic extension of time to file certain business income tax, information, and other returns.
• Sales Tax Returns: Depending on the nature of your business and your location, you may be required to file periodic sales tax returns with your state or local taxing authority.
• Excise Tax Returns: Businesses involved in certain activities, such as selling gasoline, tobacco, or alcohol, may need to file excise tax returns.
• Form 1099-MISC: While primarily used to report payments to independent contractors or freelancers, businesses may also use this form to report other types of payments, such as rents or royalties.

Key financial items on a tax documentation checklist include:

• Bank statements: Detailed records of all business-related bank account transactions.
• Credit card statements: Statements for business credit cards, documenting all expenses charged to the card.
• Loan documents: Documentation of any business loans, including repayment schedules and interest payments.
• Balance sheet: This financial statement provides a snapshot of your business’s financial position at a specific point in time, detailing assets, liabilities, and equity.
• Cash flow statement: This statement tracks the flow of cash into and out of your business over a specific period, providing insight into your business’s liquidity and ability to meet financial obligations.
• Accounts receivable aging report: This report details outstanding customer invoices and the length of time they have been outstanding, helping track unpaid invoices and manage cash flow.
• Accounts payable aging report: Similar to the accounts receivable aging report, this report details unpaid bills and invoices owed by your business to suppliers and vendors.
• Inventory records: Documentation of all inventory purchases, sales, and changes in inventory levels, essential for businesses that carry inventory.
• Fixed asset register: A register that lists all fixed assets owned by your business, including equipment, machinery, vehicles, and buildings, along with their purchase price, depreciation, and current value.
• Depreciation schedule: This schedule outlines the depreciation expense for each fixed asset over its useful life, which is important for tax reporting and financial analysis.
• General ledger: The general ledger is the central repository for all financial transactions in your business, providing a detailed record of every debit and credit transaction.
• Trial balance: This report summarizes the balances of all accounts in the general ledger to ensure that debits equal credits and that the ledger is in balance.
• Financial ratios analysis: While not a single tax document, conducting a financial ratios analysis can provide valuable insights into your business’s financial performance, liquidity, solvency, and profitability.

A must-have component of the tax preparation checklist without which accurate deduction claims may be compromised.

• Receipts for deductible expenses: Documentation for expenses that qualify for tax deductions, such as business-related meals, entertainment, travel, and home office expenses.
• Asset depreciation schedules: Documentation to support the depreciation of business assets.
• Vehicle mileage logs: Detailed records of business-related mileage for vehicles used in the course of business operations, including dates, destinations, and purposes of travel.
• Home office expense records: Documentation of expenses related to maintaining a home office, such as rent, utilities, insurance, and repairs.
• Business entertainment records: Documentation of expenses related to business-related entertainment, such as meals, events, and outings with clients or customers.

Non-negotiable elements of the tax preparation checklist. If you miss out on these, you may encounter compliance issues or inaccuracies in your tax filings.

• Partnership agreements: If applicable, have a copy of your partnership agreement handy.
• Articles of incorporation or organization: For corporations and LLCs, documentation proving your business’s legal structure.
• Operating agreement (for LLCs): Defines ownership, management, profit distribution, and dispute resolution.
• Bylaws (for Corporations): Establish rules for shareholder meetings, director appointments, and corporate governance.

• Copies of previous years’ tax returns: Provide valuable information and serve as a reference point for the current year’s filings.

• Business licenses and permits: Documentation proving your business is operating legally.
• Insurance documents: Records of business insurance policies, including liability, property, and workers’ compensation insurance.

• Documentation for charitable contributions: Records of any charitable contributions made by your business, including cash donations, goods, or services.

• Records of retirement plan contributions: If applicable, keep records of contributions to retirement plans such as 401(k) or SEP IRA.