You’ll need to provide your accountant with these documents and records, regardless of what kind of business entity you operate:
Your previous year’s federal, state, and/or local tax returns
Provided you’ve filed them before, these will contain most of what your accountant will need to get things rolling, including:
- Your legal name, Social Security Number/Individual Taxpayer Identification Number, and date of birth
- Your Employer Identification Number (aka “EIN,” which you can find on the IRS website)
- Total amount of quarterly tax payments you made in 2017, with dates
- Last year’s adjusted gross income
- Last year’s Self-Select PIN (your IRS password). If you forget what it is, visit the IRS’s Retrieve Your IP PIN page.
- State and local payroll taxes paid, which you can easily dig up if you use an online payroll provider.
All your employee and contractor-related tax forms
You’ll need to file a Form W-2 for each employee, to report any wages, tips, and other compensation you paid them during the tax year—make sure to get those together well ahead of tax time. If you withheld taxes from an employee’s paycheck, you might also need to file Form 940 and Form 941.
If your business paid $600 or more to a contractor or professional (i.e. someone who worked for you or provided you with a service but is not an employee), you’ll also need to file a Form 1099-MISC for each one.
An income statement, including cost of goods sold
An income statement lists all of your revenue and expenses over a certain period, and helps you figure out how profitable your company is. “Cost of goods sold” refers to how much it cost you to produce and deliver all of the products or services you sold that year.
A trial balance
A trial balance is a summary of all the business transactions your company made over the course of the year, organized by account type. Your bookkeeper can provide this for you.
All financial records relating to deductions
Each of these relate to a deduction that your business could potentially claim on its next return. Although your accountant might not end up needing them, make sure you’re holding onto them just in case:
- Bank and credit card statements
- Legal and professional fees
- Utility expenses
- Travel expenses
- Mileage records
- Charitable contributions/donations
- Education expenses
- Energy efficiency property expenses
- Foreign earned income and taxes paid
- Medical expenses
- Moving expenses
- Real estate taxes
- Vehicle payments and taxes
If you’ve got these basics covered, you’re mostly there. But there are a few specifics your accountant will need depending on your entity type.
If you’re a sole proprietor
“Sole proprietorship” is a fancy term for one person who owns a business and is on the hook for any company debts.
If you work alone, registered as a sole proprietorship with your state or county clerk, and never incorporated your company, you’re probably a sole proprietor.
If you run a single-member LLC and don’t elect to be taxed as a corporation, you’ll also file your taxes as a sole proprietor.
All proprietor-specific tax forms
Sole proprietors report their business earnings through Schedule C, which is attached to their personal tax return, Form 1040. If you filed these last year, make sure to give them to your accountant.
If you’re a partnership
Partnerships involve two or more parties working together to form and operate a business. The main types of partnerships are general partnership, limited partnership, limited liability partnership, and limited liability companies (that choose to be taxed as a partnership).
If you and at least one other person contribute money, property, labor, or skill to a business and expect some kind of return, have received an Employer ID Number from the IRS, and have never incorporated, you’re probably a partnership.
If you run a multiple-member LLC and don’t elect to be taxed as a corporation, you’ll also file your taxes as a partnership.
All partnership-specific tax forms
Partnerships file the U.S. Return of Partnership Income (or simply, Form 1065), and each individual member of the partnership also files a Schedule K-1, in addition to their personal tax return (Form 1040).
All partnership-specific records and information
It can be easy to miss these if you have many partners to keep track of, or do business in multiple states. Some records that people usually forget include:
- List of all states where your business has nexus
- Your partnership or operating agreement, bylaws, and any amendments you’ve made
- Names, addresses, and the SSN/EIN of each partner for the tax year
- Partner reports for owner contributions, withdrawals, loans, guaranteed payments, compensation, and benefits
If you’re a C corporation
A C corporation is a company that is taxed separately from its owners (aka “shareholders” or “stockholders”). If your company has filed Form SS-4 to obtain an employer identification number (EIN), has a board of directors, and holds regular shareholder meetings, it’s probably a “C corp.”
All C corporation-specific tax forms
C corps use Form 1120 to report their income. If you filed one last year, make sure to give it to your accountant.
All C corporation-specific records and information
These can be easy to miss, especially if you do business in multiple states. Some records that people usually forget include:
- List of states and their ID numbers where your business has reporting requirements
- Your articles of incorporation or bylaws, including any amendments
- Each individual or entity owning 2% or more of a corporation’s stock, and their information (name, address, TIN, and percentage owned)
- For multi-state businesses: report sales, payroll, and property values for each state
- Granted credit certificates issued by federal or state taxing authorities
All asset records
Your accountant will likely provide you with all of these, but we’ll include them here just in case:
- Prior year depreciation schedules that include: asset cost, date of acquisition, prior depreciation, and business use percentage
- All assets acquired within the year with: date of purchase, cost, trade-in allowance, and business use percentage
- Sales proceeds from any assets disposed of during the tax year, along with: date of purchase, cost, trade-in allowance, expenses of the sale, and accumulated depreciation
A good accountant makes all the difference at tax time.