Tuesday, February 28, 2012

Organization - Preparing Information for Yearly Taxes

This post is about how I prepare tax related paperwork to give to the accountant who files the taxes.  My learning curve and organizing tax paperwork improves each year. The first few years I did business tax prep was amazingly tough.

It is essential to have accurate records of all business income and expenditures.

Today (and yesterday and several days before) I have been collecting, sorting, categorizing, clipping together and hopefully getting 'it' all together so I can fill in the spaces on my spreadsheet and have the paper work ready to give to the accountant. I use a yellow highlighter, calculator, pen, paperclips and a pad of paper as well as a spreadsheet on my computer when I am collating all the information. I add category items to the spreadsheet as needed.

Business taxes need to be accurate, complete and clearly presented. 

I sorted the various business receipts into labeled envelopes after I totalled each category (such as supplies, office, milage, phone, internet). From here I moved to finding all income pieces of paper (T4's, any other income), listed and totalled.

All donations and health costs are organized, listed and totalled.

Next is adding up all house related costs and dividing by the percentage of the house used for the small business so that number is a business cost.

Accurate numbers are needed for inventory cost during the year and inventory cost left at the end. If there was inventory left from last year that dollar number is also necessary.

My spreadsheet has: income, inventory bought, inventory remaining, inventory at beginning the the year. In addition it will have costs that were required to generate income such as (but not limited to) stock, supplies, office, milage, shipping, advertising. I use this spreadsheet when meeting with the accountant and I give him the sorted and clipped together paperwork for each category.

Organization needed for running a small business includes keeping good financial records and filing yearly taxes correctly.

Linking up to A Bowl Full of Lemons: Organization

1 comment:

  1. I am so happy to use Turbo Tax these days! Even with rental properties, investments and such....Turbo Tax works for us. For years I did Corporate tax returns, quarterly reports and personal taxes.....collecting and keeping records......for the business we had.
    I am happy to NOT be doing that anymore!!!

    Even so.....I need to sit down soon and DO those taxes!! Thanks for the prompting!


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