The Payroll Blog

News, tips, and advice for small business owners

Things Your Accountant Wants You to Know For Tax Season

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Stephanie Davis

According to Investopieda, “tax season is the time period between January 1 and April 15 of each year when individual taxpayers traditionally prepare financial statements and reports for the previous year”.  

Experts are planning for this year to be even more complicated because it is the first tax year under the Tax Cuts and Jobs Act that was announced in 2018. Unless you love number crunching, chances are you don’t look forward to this time of year. From gathering receipts for eligible tax deductions to collecting any necessary W2’s or 1099s, getting ready to do your taxes isn’t usually an enjoyable task. As a small business owner, things can get complicated fast, and it can be easy to make mistakes that could wind up costing you a lot in fines.

When you mix in changing tax laws, and the pressure to ensure any necessary forms are properly filled out, it’s easy to see why this is a time of year many people dread. To make things a little bit easier, many people find themselves turning to a certified public accountant (CPA) or certified tax preparer for help instead of trying to DIY their taxes.

We recently spoke with Matt Weissman, a South Florida CPA and SurePayroll CPA partner, and customer, to discuss what he thinks is most important for small business owners to know in order to successfully navigate tax season.

Gather Your Important Documents

When it comes time to file your tax return, there are several options that you could fill out based on your circumstances. To see which form is appropriate for you, check out the different types of individual income tax returns on the IRS website. In order to begin this year’s tax return, you’re going to want to have the tax return from the previous year as a reference. This will help set the groundwork for what you should expect to owe or potentially receive back as a refund.

Before meeting with a CPA, you are going to want to have all of your information from the previous year. When you go with the forms and documents you used the previous year, your CPA will be able to give you forms for the new year, and point out any documents that you may have forgotten. Getting a tax organizer will also be helpful during this process. An organizer is essentially a tax toolbox that will include questions and worksheets for you to complete about your personal situation and finances. It could include any questions about changes regarding your filing status, income, expenses, sales, and more.

If you have been getting your taxes done by somebody else and don’t want to move forward with them, make sure you take your old records with you when you end that working relationship. Having a copy of those documents is always helpful and good to keep track of.

The most common tax documents you will need to have with you when meeting with a CPA are:

  • W-2 / 1099 Forms
  • Investment income
  • Income from local and state tax refunds
  • Business income
  • Rental property income
  • Social Security benefits

While there are certain tax notices you should immediately take action on, you shouldn’t jump the gun when it comes to filing taxes upon receipt of a 1099 or W2. It’s true that tax season moves quickly, but getting it done right is more important than getting it done RIGHT AWAY. Weissman suggests that a good general practice is to review all of your documents around the end of February to ensure you have copies of what you need, and then proceed with making an appointment with your accountant.

Note: With so many documents floating around come tax season, it’s easy to miss one. Weissman says the most commonly forgotten form among his small business owner clients is form 1095A – if you receive marketplace insurance, this form is critical to your tax filing.

Communicate With Your Accountant Early

When it comes to tax season, acting early is beneficial. Once your documents are gathered, Weissman suggests having an appointment scheduled with your accountant by the second week of March. Even though taxes are due April 15th, if you don’t give your accountant enough time to prepare your taxes, you may not be able to file in time and have to file an extension. When scheduling an appointment with your accountant, set clear expectations about how long they think it will take, and make sure to leave room in case they need to come back to you with any questions. Make sure you kick off your engagement with your accountant far enough ahead of the tax deadline that there’s time for them to review your documents, work on your taxes, notify you of any outstanding documents or discrepancies and for you to find those documents and get the questions answered.

Filing an extension can be an option if you need it. There are many reasons people might file an extension, including life events related to business or family. The most important thing to remember about extensions is this: if you plan to file an extension, tell your accountant that upfront. You should still contact them early enough, and ask for an estimate, but let them know that you do plan on filing an extension so they can be prepared. Depending on the type of business you have, filing extensions will vary, so you’ll want to make sure you’re following the right one so you don’t file past the extension window.

Respect Yourself as a Small Business Owner

When we asked Weissman for the biggest mistake small business owners make before scheduling an appointment with an accountant, he said so many don’t practice traditional bookkeeping.  Therefore, they are unable to produce basic forms that showcase their expenses and earnings, which makes filing taxes just about impossible.

His advice? Weissman can’t stress enough the importance of having help in the form of a bookkeeper, accountant, and/or payroll service for your small business. He also suggested that if you’re questioning the value of these services, you might as well question the value of your business—without a clear understanding of your financial reality, your objectives, and how to get from the former to the latter, you likely won’t find sustained success.

Bottom Line

While tax season is a lot to handle, proper planning and communication can make it easier. At SurePayroll, we offer small business owners an added layer of protection with our taxes paid and filed guarantee: if you receive a notice from the IRS, or any other tax agency, based on a filing that SurePayroll made, we’ll work with the agency to help resolve the issue on your behalf.  And, if we’re at fault, we’ll pay all the associated penalties and fines.

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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.