Although it’s not what corporations love focusing on, taking care of tax obligations is an important part of doing business. While there’s no way to get around the fact that dealing with taxes is a task that takes some time, there are ways to make this process go as efficiently as possible.
When it comes to being efficient with taxes, preparation is key. Corporations can save a significant amount of time by staying organized and taking a methodical approach to their preparation efforts. So with that in mind, we want to go through a tax preparation checklist of the most important things for a corporation to have in order for tax time:
-Income
You will want to have all gross receipts from sales or services. And for corporations that are accrual based taxpayers, it’s important to have detailed sales records that are well-organized.
-Inventory
If your corporation has inventory, you will need to have several things together for tax purposes, including beginning inventory, inventory purchases and ending inventory. It’s also important to have an accurate count of items removed for personal purposes, as well as to factor returns and allowances into this category.
-Business Checking/Savings Account Interest
Even though this one is easy to overlook, it’s something that needs to be included in tax prep efforts. Otherwise, a corporation will end up paying for this oversight down the line. Either a 1099-INT form or statement work as documentation to record this category for tax preparation purposes.
-Other Income
Throughout each quarter, a corporation may have other types of other types of income. By keeping up with recording any other income that’s received, corporations can streamline the tax prep process by ensuring all necessary documentation is easily available in an organized manner.
-Expenses
There are a lot of expenses corporations need to track throughout the course of the year. That’s why it’s so important to have strong bookkeeping policies in place. Without those types of policies, far too many expenses will end up falling through the cracks. In terms of notable expenses to track, advertising, transportation and travel are at the top of the list.
For corporations with a significant number of employees, an app or other cloud solution can be very useful for staying on top of expense tracking like travel. Other expenses that need to be tracked and organized during tax prep include commissions paid to subcontractors, depreciation, interest expenses and legal fees.
This checklist really drives home the fact that tax preparation for corporations is very involved.
