Small Business Tax Preparation Checklist

While starting a new year often means new opportunities and a fresh start for your small business, it also means that it’s tax time. Compiling all the necessary documents and IRS forms, and adhering to their various deadlines, can be a daunting task that takes time away from running your business. To help relieve some of the stress around filing appropriately, we’ve put together a small business tax preparation checklist for you to follow this tax season.

The first category of documents pertains to your business income. You’ll want to gather any receipts, sales record totals, and bank statements:

  1. Gross receipts from sales
  2. Sales records
  3. Receivables
  4. Interest from business bank accounts
  5. Any other types of income

The second category of things to prepare, if necessary, relates to your inventory, or cost of goods sold (COGS). You’ll want to show the history of activity over the course of the year and how your inventory and materials fit into that equation:

  1. Current Inventory
  2. Change in inventory total amount
  3. Inventory purchases
  4. Items removed from inventory for personal use
  5. Materials
  6. Supplies

The last category of items to have ready for your tax preparation are expenses. Depending on your company, expenses can fall into many different types.

  1. Marketing Expenses
    • Email Marketing
    • Social Media Advertising
    • Traditional Advertising
    • Business Cards
  2. Communication Expenses
    • Landline
    • Mobile phones used for work
    • Fax
    • Internet
    • Computers and Accessories
  3. Travel Expenses
    • Hotels
    • Airfare
    • Mileage Logs
    • Meals
    • Rideshares (Uber, Luft, Taxi)
    • Internet
  4. Personnel Expenses
    • Contractors
    • Consultants
    • Accountants
    • Employee Wages
  5. Operational Expenses
    • Office supplies
    • Office space rental
    • Lease expense on vehicles used for work
  6. Legal Expenses
    • Casualty loss insurance
    • Tax errors and omissions
    • Legal Counsel
  7. Financial Expenses
    • Cost of assets and the first day of business use
    • Activity on personal use of assets
    • Sales price and sale date of any assets sold
    • Mortgage interest on a building owned by the business
    • Business loan interest
    • Investment expense and interest
  8. Home Office Expenses
    • Square footage of home office space
    • Total square footage of the home
    • Hours of use (in-home daycare)
    • Mortgage interest or rent
    • Homeowner’s or renters insurance
    • Utilities
    • Cost of home and separate improvements, and day of first business use

Now that you know what you need to have ready, you can ease your filing woes this tax season.

This article is up to date and accounts for tax law changes for tax year 2018 (tax returns filed in 2019). Learn more about tax reform enacted under the Tax Cuts and Jobs Act here.

Related Posts