If you have a bookkeeper or you maintain your financial records using accounting software such as QuickBooks, tax preparation is as simple as providing your accountant with a copy of your QuickBooks file. If not, you have your work cut out for you. The key to tax preparation is organization. Being organized will reduce stress and save you time and money and ensure that you get all the deductions that you are entitled to. So, where do you start?
First, gather the following: bank statements, merchant statements, credit card statements, invoices, purchase orders, sales receipts, expense receipts, tax remittance forms and any data related to employee expenses.
Next, organize your records by month separating them into two main categories: income and expenses. The more organized your information is the less time your tax preparer will have to spend trying to decipher information. If they charge on an hourly basis, being organized will greatly reduce your fee.
Then, sort through your records and separate them by month and type. For example, under the expense category you might have advertising, office supplies, utilities, labor, and taxes to name a few.
Finally, if you are preparing your taxes by yourself select appropriate tax software based on your business type. If you are hiring a professional, seek out a tax preparer that understands your business and can provide sound advice. Click here for helpful tips on how to choose a tax preparer.
Rod D. Newman
11 years agoYou can report abusive tax preparers to the IRS on Form 14157 , Complaint: Tax Return Preparer. Download Form 14157 and fill it out or order by mail at 800-TAX FORM (800-829-3676). The form includes the address where it should be mailed.
Raymundo Yates
11 years agoShred all paperwork used to prepare and calculate taxes such as receipts, bank records, credit card statements, and various other documents when they are no longer needed. Identity thieves can obtain personal information by retrieving it out of the trash and dumpsters.
Brigitte Y. Mcmahon
11 years ago– The IRS has a strict set of rules and regulations that a tax preparer must follow. You should expect your preparer to adhere to these rules. The ultimate responsibility for an accurate tax return lies with you. During my interview process I ask many questions in an effort to uncover every tax deduction legally available. Be wary of a tax preparer that accepts your data without asking any questions or suggests amounts to use on the return.. It goes without saying that you should be honest with your preparer. It is not the responsibility of the preparer to act as an auditor, nor will he or she necessarily ask to see all your supporting documents or request proof of the amounts you provide.
Joanna Weiss
11 years agowho is required to register or reregister under IRC 4101 and fails to do so. The amount of the penalty is $10,000 for each initial failure to register or reregister and $1,000 for each day thereafter that the Terminal operator or Carrier fails to register or reregister. This penalty is in addition to any tax due.
Dario U. Underwood
11 years agoReview financial records such as income statements and documentation of expenditures to determine forms needed to prepare tax returns.