Makin' a List, Checkin' It Twice

The winter holiday season is fast upon us, for better or for worse. But before we make our gift (or Grinch) lists, we business owners have another important matter to attend to: collecting documentation for our visit with our CPA.

You have made an appointment, haven’t you? And you’ve scheduled it for well before the end of the year? Because it’s important to discuss your situation now, so you’ll know if you should do anything to reduce your tax burden (such as buying equipment or funding a retirement account) before December 31.

Let's say your appointment is set for just after Thanksgiving. What will you need to take with you? That depends on your individual circumstances. The following list isn’t comprehensive, but it’s a good start:

o   Your most current business Profit & Loss  and Balance Sheets.

o   Estimates of your expected income/expenses to complete the year.

o   Anticipated Schedule K-1s from other companies you may have an ownership in, and W-2s from other companies you may be receiving income from.

o   Anticipated cash balance at the end of the year. As mentioned above, you may need to go ahead and purchase now those large items you have planned for the future, in order to reduce your 2012 tax liability.

Note to business owners with inventory: Don’t take your computer’s word for it that you have X number of items A, B, and C. Take a physical year-end inventory to monitor “shrinkage” caused by theft (whether external or internal), breakage, or whatever. We'll will need accurate information to prepare your Business Personal Property Tax return.

Finally, don't forget to make a list of questions and issues to discuss with your CPA, like: 

o   Any “life change” you have experienced in 2012 – marriage, divorce, new baby, adoption, new dependent, etc. 

o   If you’ve sold your home, bought a home, made investment gains or suffered losses, made new investments in a partnership or company… just to mention a few.

o   Questions about how upcoming changes in tax law will affect you, such as those associated with Obama-Care.

o   If you’re approaching retirement, you might discuss whether to take Social Security as soon as you’re eligible or if it would be more beneficial to wait.

Once you’ve made your appointment, created your list, and located the pertinent documents, you’ll be able to relax, kick back, and 

Have a Happy Thanksgiving!