Hinkle + Landers is
a small business, so we know how stressful tax preparation can be. Trying to
sort through all the receipts and remember everything from the year before can bring
on headaches. There are 5
main items that we recommend preparing before you give your CPA all your
receipts and logs for taxes. These
items will make the whole process smoother on both you and your accountant.
1. Financial Statements — Preparing a basic set of
financial statements, including the balance sheet, income statement, and cash
flow statement, ahead of time will help your accountant understand what
happened with your business during the year.
2. List of Capital Asset Activity — If, during the
year, you bought, sold or retired any capital assets, you will need to account
for it in your tax return. You will need to prepare a list of those capital
asset changes, so your accountant can properly account for it in your tax
return. Most of the time the software
you use for your business, can easily print out the activity that took place in
your capital asset account(s).
3. Vehicle Log — We get a lot of questions regarding vehicles,
and when a vehicle is used for personal and business purposes. When you used your vehicles for business
purposes, you can claim a portion of the vehicle’s expenses as a tax deduction
on your business income. This deduction
can be calculated by two different methods, which your accountant can help you
with. For both methods, you need to keep
track of your business miles that are driven each year. You can do this by creating a log. Then when your accountant begins working
on your tax return, you can give the log to your accountant.
4. Summary of Home-Office Expenses — When you have
your office in your house, and you regularly meet your clients there, you can
claim some of your home/office expenses as business expenses. Your accountant can help you with the
calculations of determining how your home expenses are broken out into business
expenses. You should talk to your accountant early in order to find out what
your accountant will need regarding receipts, or other documents.
5. 1098 Forms for Mortgage Interest and Property Taxes
— If you have an office in your home that is used as your primary place of
business, you will need to provide the 1098 form that you received from your
mortgage company, to your accountant.
This way your accountant can take into account any deduction related to
your home office being your primary place of business. Also, your accountant can claim the
mortgage-interest deduction that you are entitled to as a homeowner on your
personal tax return.
Firm Profile: Hinkle +
Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms. Hinkle + Landers, CPAs has been operating for
over 40 years in Albuquerque as well as all parts of New Mexico. Hinkle + Landers, CPAs also provides audit,
fraud and forensic accounting services as well as tax
preparation, and bookkeeping in Albuquerque New Mexico.
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