What Does My Accountant Need to Do My Taxes?

Working with an accountant for tax preparation streamlines the annual filing process. Providing correct and complete documentation from the outset ensures accuracy and helps avoid delays or issues with tax authorities. Understanding the information needed is an important first step for a smoother tax season.

Key Documents for Individual Tax Returns

For individuals, comprehensive income documentation is needed. Provide W-2 forms for wages, salaries, and tips. For other income sources like non-employee compensation, interest, dividends, or brokerage transactions, you will need various 1099 forms:
1099-NEC
1099-INT
1099-DIV
1099-B

Other income sources like Social Security benefits or unemployment compensation are reported on forms like SSA-1099 or 1099-G.

Beyond income, your accountant needs information for potential deductions and credits. This includes mortgage interest statements (Form 1098), property tax statements, and student loan interest statements (Form 1098-E). For education expenses, tuition statements (Form 1098-T) are necessary.

Significant medical expenses may require detailed summaries and receipts if you itemize deductions. Charitable contributions, childcare expenses, and energy-efficient home improvement receipts are also important for claiming applicable deductions or credits.

Investment and financial account statements are needed, especially if you have capital gains or losses. Year-end investment statements and summaries of cryptocurrency transactions help account for all reportable financial activity. This information ensures all investment income, sales, and related adjustments are properly reported on Form 1040.

Finally, your accountant needs foundational personal information. This includes your prior year’s tax return. Personal identification information, such as Social Security Numbers or Individual Taxpayer Identification Numbers for all individuals listed on the return, is essential for accurate filing. Providing bank account information allows for direct deposit of any refund or direct debit for taxes owed.

Key Documents for Business Tax Returns

Business tax preparation requires comprehensive financial statements. Accountants typically need a Profit & Loss (Income) Statement and a Balance Sheet for the tax year. These statements summarize the business’s revenues, expenses, assets, and liabilities, providing foundational data for the tax return. Some businesses may also provide a Statement of Cash Flows.

Income documentation for businesses includes sales records, invoices, and bank statements that reflect all deposits. Forms such as 1099-NEC for nonemployee compensation and 1099-MISC for miscellaneous income received are crucial for accurate reporting of business revenue. Detailed expense documentation is important for maximizing allowable deductions. This comprises expense ledgers, receipts for major purchases, and bank and credit card statements clearly showing business expenses.

If the business has employees, payroll records are necessary, including W-2s issued to employees and related payroll tax forms like Form 940 or 941. Records of business asset purchases and sales, alongside depreciation schedules from prior years, are needed to calculate current year depreciation deductions.

Information regarding business loans, including loan statements and records of interest paid, is required. The accountant will also need the prior year’s business tax return, entity formation documents, and records of any estimated tax payments made throughout the year. These documents collectively provide a complete financial picture for accurate business tax filing.

Preparing Your Documents for Your Accountant

Organizing your tax documents effectively streamlines the preparation process for your accountant. Categorize documents by type, such as income, expenses, and deductions, or by the specific tax form they relate to. This can be done using physical folders or digital files, ensuring clarity and easy accessibility.

Completeness is important when gathering your information. Provide all relevant documents, even if you are uncertain whether an item is deductible or necessary; your accountant can determine its relevance. Missing documents can cause delays.

Deciding between digital and physical submission methods depends on your preference and your accountant’s capabilities. Many tax professionals utilize secure client portals for digital submissions, offering a convenient and secure way to transfer sensitive information. If submitting physical documents, ensure they are clearly legible. If scanning documents, aim for high-quality images.

Before your appointment, compile a list of questions or specific situations to discuss with your accountant. This helps ensure all unique aspects of your financial year are addressed during tax preparation. Proactive organization and clear communication contribute to an efficient and accurate tax filing experience.

The Tax Preparation Process with Your Accountant

Once you provide your financial documents, your accountant begins preparing your tax return. They will review the submitted information, often asking follow-up questions or requesting missing details. This initial review ensures all income is reported and all eligible deductions and credits are considered.

After gathering all necessary information, your accountant prepares your tax return, utilizing specialized software to calculate your tax liability or refund. This involves applying current tax laws and regulations to your specific financial situation. Their expertise helps ensure your return is compliant and optimized.

Review of the prepared tax return is a crucial step. Your accountant will present the completed return for your careful examination before it is filed. Verify personal details, income figures, and reported deductions to ensure accuracy, as you are ultimately responsible for the information submitted.

Upon your approval, your accountant will file the return, typically through electronic means (e-filing), which is generally faster and more secure than paper filing. For e-filing, you will likely sign a Form 8879, which serves as your electronic signature authorization for the IRS. If taxes are owed, your accountant can guide you on payment options. If a refund is due, direct deposit is often the quickest way to receive it.

After filing, retain copies of your finalized tax return and all supporting documents for a recommended period, usually at least three years. This provides a clear audit trail and ensures access to financial information for future inquiries or audits from tax authorities.