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small business tax preparation

Small Business Tax Preparation: What Documents Do You Need?

One of the most important aspects of every tax season is preparation.

It doesn’t matter if you’ve decided to tackle your business’s taxes yourself or you’re going to hire someone to do the heavy lifting. Either way, you’ll need to have several documents and files at the ready.

To help you prepare, here’s a quick list you can reference to make sure you have everything you need. Print out this page or bookmark it so you have it handy as you prepare for this year’s taxes. You may want to also keep it around so you know what to set aside each year and you’re not scrambling to get your documents together right before you file.

Here’s a quick look at some of the documents you will need:

What Documents Do You Need at Tax Time?

Tax forms: Just like individuals typically fill out Form 1040 to file their income taxes, small businesses need to file a basic form every year – but that form varies depending on your business structure. A quick list:

  • Sole proprietor: Schedule C or Schedule C-EZ, which is attached to your Form 1040
  • Partnership: Form 1065 and Schedule K-1
  • C-corporation: Form 1120
  • S-corporation: Form 1120-S

More tax forms: You might be required to submit additional tax forms depending on your business structure, whether you have employees and other considerations. These include:

  • Form 940 (Employer’s annual unemployment [FUTA] tax return)
  • Form 941 (Employer’s quarterly federal tax return)
  • Form 943 (Employer’s annual federal tax return for agricultural employees)
  • Form 944 (Employer’s annual federal tax return)
  • Form 1099-MISC (Miscellaneous income)
  • Form 4562 (Depreciation and amortization)
  • Form W-3 (Transmittal of wage and tax statements)

This is a very abbreviated list. You’ll want to consult with IRS.gov for a full list of tax forms depending on your business structure, whether it’s a sole proprietorship, corporation or partnership.

Taxpayer Identification Number (TIN): This isn’t really a tax document so much as a single ID number, but it’s information you’ll still need to have on hand. This nine-digit number helps the IRS identify your business. For businesses, your TIN is likely your Employer Identification Number (EIN).

Financial statement: This is essentially a summary of your small business’s financial situation. It includes an income statement (or profit-and-loss statement), balance sheet and a cash flow statement. Combined, these statements will help you or your tax preparer understand things such as how much income you bring in, the worth of your assets, how much debt you have on the books, owner equity, and how cash is flowing in and out of the business, among other things.

Supporting financial records: There are numerous other records, either that your business generates or that you pick up along the way as a result of doing business. They include things such as:

  • Bank statements
  • Credit card statements
  • Expense receipts
  • Loan documents
  • Partnership agreements
  • Rental documents
  • Sales records

Last year’s business tax return: This can help provide a roadmap for either you or your preparer. If something looks considerably different than it did in the previous year, that can be a signal that you might need to give that part of your return another look.

Still not sure you’ve got the right small business paperwork ready? That’s OK – there’s nothing simple about taxes, corporate or otherwise. If you’re looking for someone to keep you organized and handle this task for you, the experts at McManamon & Co. are here to help. We’ve been providing tax services (and numerous other types of assistance) to small and midsize businesses for years, and we can set you up with a blueprint at the turn of each year to make it easier for you to gather necessary documents.

Business tax deadlines are coming ever closer. Give us a call at 440.892.9088 or contact us online, and let us provide you with more information about our tax services, including all the tasks we tackle, pricing and more.

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