5 Important Documents Needed For Small Business Taxes

With tax season in full swing, small business owners need to know what documents are needed for small business taxes and how these documents help your Certified Public Accountant (CPA) reduce tax liability for your business.

Take a close look at the list below and bring as many documents listed as possible. It’s the best way to help your CPA maximize deductions and credits this tax season.

1. Incorporation Documents & Social Security Card

Documents for an LLC are called Articles of Organization, and documents for Corps are called Articles of Incorporation. In Texas, this collection of documents is referred to as a Certificate of Formation.

For an LLC, relevant tax documents should include the following:

  • Entity name
  • Street & mailing addresses
  • Name of registered agent & his address
  • Names and addresses of persons who formed the LLC
  • A management statement

If you own a small business and you’re filing taxes for the first time, don’t worry. You didn’t lose these documents, and you can easily locate them where you filed for incorporation, either online or in person.

Also, don’t forget your social security card.

2. Last Year’s Tax Return

When we think about what documents are needed for small business taxes, it helps to include your business’ latest tax return.

Tax returns provide a snapshot of your tax situation and help accelerate tax preparation.

3. Financial Statements

A thorough financial statement is the best way for a CPA to understand your business and reduce your taxes.

Ensure that your financial statement includes, at a minimum, three documents, per the SEC. Include the following:

  • Balance Sheet – an overview of your assets, liabilities, and shareholders’ equity
  • Income Statement – a report that covers your revenue over the last year
  • Cash Flow Statements – a summary of all of your inflows and outflows of cash

If applicable, your cash flow statement should include gains and losses from investments.

4. Expenses & Receipts

Be sure to bring your business’ receipts and documents that reflect last year’s expenses. The more thorough your receipts, the better the possibility for your CPA to find deductions and save you money. Include the following:

  • Receipts for office supplies
  • Property tax records
  • Mileage logs or gas receipts
  • Meal and travel logs

Remember, it’s better to include too much documentation instead of too little. If you’re unsure if a receipt or expense record is needed, go ahead and bring it.

5. Payroll Documents

Small business owners need to bring copies of W-2s for employees and 1099-MISCs for contractors. These forms are necessary for end-of-year taxes. Include any retirement plans you may offer. You can claim deductions on them.

Summary of Home Office Expenses

Small businesses run from home are eligible for significant write-offs, so make sure to give your CPA all applicable paperwork. The IRS lists two qualifications for home offices. Ask yourself:

  • Is your home the place of regular and exclusive use?
  • Is your home your principal place of business?

You should have documents that verify your mortgage, insurance, maintenance costs, and utility bills.

Before your meeting, make a note of the square footage of your office; it matters when determining deductions. If you rent, bring a record of rental payments.

Small Businesses That Use Accountants Are Satisfied With the Results

A 2019 report from HR firm Onpay concluded that only 30% of small business owners use an external accountant. But, among those who do, nearly 90% say they trust their accountant to manage their business’s finances.

Knowing what documents are needed for small business taxes will empower your CPA to maximize tax savings for your business.

Jeremy A. Johnson, CPA, Provides Tax Preparation & Filing

Jeremy A. Johnson, CPA, is a trusted CPA firm that handles complex tax issues and creates effective plans to reduce tax liability.

Click here to schedule an appointment with us, or call (888) 623-2915.

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Jeremy A. Johnson

Meet the Author
Jeremy A. Johnson, CPA, is an expert in strategic tax planning, accounting, CFO services, and thought leadership.

Jeremy writes for small business owners who need actionable information on tax strategy, efficient accounting practices, and plans for long-term growth.

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