Preparing Income Statement for Tax Filing
- projectdoneangie
- Jan 15, 2012
- 2 min read
Now is the time to begin preparing your numbers for tax filing.
If you are using a software program, it is pretty fast to pull this information together. If you are using the pen and paper method, you will need a little time and all receipts to get your totals in order.
The numbers from the Income statement (or P&L report) need to be accurate since they are used to prepare your tax return or plan next year’s budget. It is a good idea to review this information on a monthly basis which will save lots of time at year end. Make sure that all income has been reported and all expenses are legitimate. Also, make sure that all bank statements are balanced so that nothing is missed.
All information from this report should have a paper trail backup. If any of your numbers are ever in question, it is a good idea to have the paperwork handy to prove yourself. It might seem like a great idea to go paperless until you have to spend hours printing your bank statements for an accountant or an auditor!
It is simple to have one box with the entire year on hand so that you can access your information if it is ever questioned. Your numbers tell the story of your life. Make sure it is a complete story.
Your CPA will need the Income Statement along with the Balance Sheet and any 1099’s and W-2’s to complete your tax return. The Balance Sheet shows all account balances for year end and will help your CPA understand your Assets and Liabilities.
I am here to help and answer any questions that you have. You can subscribe to my blog for future information or send me a message on my Facebook page at http://www.Facebook.com/ProjectDone which I will gladly answer. If you feel that you need additional help, you can contact me by email and we can set some time aside to get your numbers to work to your advantage!
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