How to Save Thousands a Year on Tax Preparation
How to Save Thousands a Year on Tax Preparation
2.The CPA will need the following items. Be sure to have all of them to him in a timely manner.
• Balance Sheet of 12/31/08
• Income Statement for 1/1/2008 through 12/31/2008
• 1099s sent and received
• Year-end bank statements and reconciliations
• Inventory listing as of 12/31/08
• Copies of W-3 and W-2s and fourth quarter payroll reports
(Forms 941,UITR,CO withholdings)
• Details of any items included in miscellaneous income
• 2008 standard journal entries made by you
• Capital asset list and invoices for purchases
• Any new leases or loans
3.Give yourself plenty of time to get your inventory done – the CPA will need it for your tax return.
4.Be sure to have all documents to the CPA that he asks for, so he does not waste time waiting for you to send something over. Another expensive time waster is that he starts on your books and then he doesn’t have everything, so then he has to wait for what he needed, then start again. As we all know, the more this happens, the more expensive the process.
5.Do reconciliations on all accounts, including bank accounts, credit card accounts, and loan accounts, to verify your account totals are correct for year end before sending your books to the CPA. This is a very time consuming process, and you can save by having your bookkeeper (in house or outsourced) do these reconciliations, as opposed to the CPA firm.
6.Have a dollar figure for your actual bad debt and also what you estimate it to be for the next year.
7.Do the Year End General Journal Adjusting Entries that the CPA will figure for you in house or thru your outsourced resource, rather than have the CPA do it? Be sure that the previous year’s entries have been made. If these entries have not been made in your books, then you will have to pay someone, either the CPA or a bookkeeper (in house or outsourced) to figure these out again and make the entries. This often times is one of the most expensive pieces of the process each year, because the entries were not made the previous year end.
8.If you have taken out any loans, set up any Lines of Credit, or bought any assets by loans in the year, make copies of these contracts and then be sure that the dollar figure in the account that represents that loan matches what the year end statement says. For example, if you owe $25,340 on the loan as of 12/31/08, then your Loan Payable account should show the same. Associated with these accounts are interest accounts, and your books/GL accounts should verify what your statements show you paid during the year in interest. And always send in year end statements to the CPA firm.
9.If you have added any assets, it would be time saving to have your bookkeeper (in house or outsourced) be sure that the asset registers are up-to-date for the year, and that the depreciation is correct for the year, in that the dollar figure in your depreciation expense account matches what your asset depreciation schedules reflect.
10.The TOP way to save money is to have a 2nd set of eyes review all your accounts to be sure no mistakes have been made in entries during the year. There are many ways you can enter info improperly in QuickBooks, and not be aware of it, making your bottom line, which is the number you pay your taxes off of, incorrect. It costs you whether it is too low or too high. So it bears repeating….best money saving tip for the tax season is to have a 2nd set of eyes review your books before sending them to the very expensive CPA. You can have the CPA do this, but this is the most expensive way to do it. It is better to have someone in your company take a second look or outsource to a bookkeeping firm to do this for you.
How to Save Thousands a Year on Tax Preparation - To learn more about this author, visit Lynda Jamysen's Website.
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1.Do the “Bookkeeping” in house or outsource your bookkeeping to a service that is less expensive than a CPA firm would provide. This can save you $1000’s in that the CPA takes less time to prepare your taxes, and you are not paying the CPA or his Junior Accountant to do the bookkeeping for you.
2.The CPA will need the following items. Be sure to have all of them to him in a timely manner.
• Balance Sheet of 12/31/08
• Income Statement for 1/1/2008 through 12/31/2008
• 1099s sent and received
• Year-end bank statements and reconciliations
• Inventory listing as of 12/31/08
• Copies of W-3 and W-2s and fourth quarter payroll reports
(Forms 941,UITR,CO withholdings)
• Details of any items included in miscellaneous income
• 2008 standard journal entries made by you
• Capital asset list and invoices for purchases
• Any new leases or loans
3.Give yourself plenty of time to get your inventory done – the CPA will need it for your tax return.
4.Be sure to have all documents to the CPA that he asks for, so he does not waste time waiting for you to send something over. Another expensive time waster is that he starts on your books and then he doesn’t have everything, so then he has to wait for what he needed, then start again. As we all know, the more this happens, the more expensive the process.
5.Do reconciliations on all accounts, including bank accounts, credit card accounts, and loan accounts, to verify your account totals are correct for year end before sending your books to the CPA. This is a very time consuming process, and you can save by having your bookkeeper (in house or outsourced) do these reconciliations, as opposed to the CPA firm.
6.Have a dollar figure for your actual bad debt and also what you estimate it to be for the next year.
7.Do the Year End General Journal Adjusting Entries that the CPA will figure for you in house or thru your outsourced resource, rather than have the CPA do it? Be sure that the previous year’s entries have been made. If these entries have not been made in your books, then you will have to pay someone, either the CPA or a bookkeeper (in house or outsourced) to figure these out again and make the entries. This often times is one of the most expensive pieces of the process each year, because the entries were not made the previous year end.
8.If you have taken out any loans, set up any Lines of Credit, or bought any assets by loans in the year, make copies of these contracts and then be sure that the dollar figure in the account that represents that loan matches what the year end statement says. For example, if you owe $25,340 on the loan as of 12/31/08, then your Loan Payable account should show the same. Associated with these accounts are interest accounts, and your books/GL accounts should verify what your statements show you paid during the year in interest. And always send in year end statements to the CPA firm.
9.If you have added any assets, it would be time saving to have your bookkeeper (in house or outsourced) be sure that the asset registers are up-to-date for the year, and that the depreciation is correct for the year, in that the dollar figure in your depreciation expense account matches what your asset depreciation schedules reflect.
10.The TOP way to save money is to have a 2nd set of eyes review all your accounts to be sure no mistakes have been made in entries during the year. There are many ways you can enter info improperly in QuickBooks, and not be aware of it, making your bottom line, which is the number you pay your taxes off of, incorrect. It costs you whether it is too low or too high. So it bears repeating….best money saving tip for the tax season is to have a 2nd set of eyes review your books before sending them to the very expensive CPA. You can have the CPA do this, but this is the most expensive way to do it. It is better to have someone in your company take a second look or outsource to a bookkeeping firm to do this for you.
How to Save Thousands a Year on Tax Preparation - To learn more about this author, visit Lynda Jamysen's Website.
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