How much does it cost for business taxes to be prepared at the end of the year? Are you paying too much? Before shopping around for a new accounting service, first take control of some money saving activities that you can do yourself RIGHT NOW to save your business money.
Here are 10 quick double checks to ensure that your tax preparation bill doesn’t cause you to pass out. Before turning your financials over to your tax accountant, make sure…
All of your bank accounts (and credit card statements) have been reconciled. Reconciling is a hassle sometimes, but if your team does it in-house it can save you a lot of tax preparation time.
Your Accounts Receivable does not have a credit balance (that means a negative total).
If you bought equipment this year, then your Fixed Assets should have increased. Check that your assets in your accounting software accurately show that increase.
To run a Last year / This year Comparative Balance Sheet if you have a partnership or corporation. Last year’s numbers should equal those on your tax return. If they don’t something has been edited and your tax preparer will have to spend time (and your money) looking for that. Possibly you can drill down the totals before then see what balances had changed and why. (Never make changes to a previous year’s books after a tax return is done!)
You don’t have a large Undeposited Funds balance. If you do, then go and complete the “deposits” that are unfinished or make sure there are legitimate reasons that can be identified.
In your chart of accounts the Sales Tax Payable account equals the “amount due” for your next sales tax return. If they do not match check the transactions in your Sales Tax account in your accounting software compared to your filed sales tax returns to see where you may have over or underpaid during the year.
Your total Salary expenses = the total of all W-2s Box 1.
You prepare Forms 1099s to your non-corp vendors (who you paid >$599).
You reconcile your State Excise tax return gross to your gross income. In your accounting software run a report for the year to see what your gross sales were (note: if you file on a “cash” basis then run the report on a “cash” basis, and if you file on “accrual” then run the report on “accrual”)
You haven’t comingled personal and business expenses or receipts.
These ten tips ought to put you in top shape for a smaller business tax preparation bill this time around. Good luck!