See the Details Your Accountant Needs When Filing Your Tax Returns
If you're a responsible citizen, you know filing a tax return isn't an unnecessary or burdensome activity. Timely tax returns offer many benefits, like allowing you to claim tax deductions and refunds, adjusting capital gains and losses, saving you from penalties and easing the loan application process. But before you enjoy any of these benefits, tax return filing has to be done correctly and accurately every other year.
One way to avoid mistakes while filing tax returns is getting a reputable accountant to do it for you. These professionals understand the tax procedures and laws and provide high-quality service, provided they have the right information. Here is a list of the details they need when filing tax returns for you.
Before a tax accountant can file tax returns for any individual or company, they'll need identification data to acquire the tax file number. Individuals offer a copy of their birth certificate, passport, citizenship certificate or foreign passport, while a company will provide their business number. This information is required even if you are working with the same accountant you hired last year.
Last Year's Tax Return
Even though you probably don't qualify for the same deductions you got last year, the tax accountant will require the recent tax return. The documents will help them access vital information and calculate deductions easily. If you are working with a different accountant, be sure to discuss the discrepancies you experienced in the last year's returns so they can help find the best solution.
Financial Business Reports or Income Statements
To file the tax return for your company, you need to provide the accountant with the copies of your financial business report. This includes details like the profit-loss report to show the profit or losses you made. You may also need to provide cash flow statements to show the transactions affecting the cash account and a balance sheet to display liabilities and assets. Those filing individual tax returns will provide an income statement.
If you bought or sold a property, the tax preparer will need the relevant details. The accountant will ask for the asset documents or receipts, including the fixed assets. Don't forget to include details for properties that depreciated during the year.
List of Expenses
Your tax preparer or accountant needs to know your expense records to verify your individual or business outflow and find the right deductions. So, bring all the expense documents or records you have like bills, bank statements, receipts and credit card statements among others.
The key to ensuring the tax preparer files your tax returns correctly and in good time is by providing the required details. Please do not hold back any details, be it your expenses, profit and loss, asset or identification details. Remember, the data should be legit and accurate to avoid penalties.