Tax Prep!

Once you’ve finalized your year-end bookkeeping, the next step is getting your tax documents in order. Whether you work with a CPA, tax preparer, or file taxes yourself, having clean, organized reports makes the entire process smoother—and helps you avoid delays, errors, or missed deductions.

Here’s a breakdown of the essential financial reports and documents your tax preparer will typically need:

1. Year-End Profit & Loss Statement (P&L)

Also known as an Income Statement, this report shows your total income and expenses for the year. It’s a snapshot of your business’s performance and forms the basis for calculating taxable income. Review it carefully before sharing to ensure all income and expenses are properly categorized.

2. Year-End Balance Sheet

The Balance Sheet gives a snapshot of your business’s financial position at year-end, including assets, liabilities, and equity. It’s especially important for incorporated businesses and may be required when filing certain tax forms. If something seems off—like negative bank balances or mismatched equity—flag it before filing.

3. General Ledger (if requested)

Some CPAs may ask for the full General Ledger, which is a detailed record of all financial transactions for the year. This is often used for deeper reviews, audits, or when the preparer wants to verify specific entries or accounts. You can export this directly from most accounting software platforms.

4. Supporting Documentation for Major Purchases or Deductions

If you purchased large assets (like equipment, furniture, or vehicles), be ready to provide invoices, receipts, or loan agreements. Your tax preparer may need these to calculate depreciation or verify deductibility. It’s also helpful to provide records for items like charitable contributions, home office use, or startup costs.

Providing accurate, complete financial reports helps your CPA file your return efficiently and ensures you’re getting all eligible deductions. It also reduces the risk of back-and-forth requests that can delay your filing—or worse, trigger unnecessary scrutiny from the IRS.

Disclaimer: This post is intended for informational purposes only and should not be considered legal or tax advice. Always consult your tax professional or CPA for guidance specific to your business and current IRS regulations.