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General checklist and self-employed

Income Items
Be sure to include all income sources when creating your small business checklist. This could include income from your day-to-day operations as well as any investment or secondary income.

• Gross receipts from sales or services
• Sales records for accrual-based taxpayers (accounts receivable)
• Returns and allowances
• Business checking/savings account interest (1099-INT or statement)
• 1099-NEC (independent contractor or professional services work) or W-2 income
• Other income, including rental income, federal and state gasoline or fuel tax credit or refund

Costs of goods sold
Some categories may not apply each tax season, so you should only include what applies for 2021 on your small business tax checklist. If you produce, purchase, or sell merchandise in your trade or business, you’ll need to take your inventory into account at the beginning and end of the year.

• Beginning inventory total dollar amount
• Inventory purchases
• Ending inventory total dollar amount
• Items removed for personal purposes
• Materials and supplies

Expenses
A wide range of costs can fall under applicable business expenses. Don’t miss recording any of these on your small business tax preparation checklist. Our tax pros will help you find each and every deduction you deserve.

• Advertising
• Phones (landline, fax or cell phones related to business)
• Computer & internet expenses
• Transportation and travel expenses
  • Local transportation: Did you take any business trips this year? You’ll want to include your mileage along with any car and truck expenses (from app-based mileage trackers like Everlance). For public transportation, parking and tolls, you should include your contemporaneous log (recording of transactions as they happen) or receipts.
  • Travel away from home: You should account for actual expenses if you drove — or airfare for any flights. There are helpful app-based trackers (Everlance is a great one) available so you can keep up while you’re on the go. Be sure to include costs for hotels; meals and tips; and taxi fares and tips. Remember to include any miscellaneous expenses, such as your internet access (hotel, internet café, etc.).
• Commissions and fees
• Contract labor expenses paid to subcontractors and independent contractors
• Depreciation
  • Cost and first date of business use of assets
  • Records relating to personal use of assets
  • Sales price and siposition date of any assets sold
  • Documentation of prior-year depreciation
• Amortization of intangible assets (e.g., patents or copyrights held)
• Business insurance
  • Casualty loss insurance
  • Errors and omissions
  • Other
• Interest expense
  • Mortgage interest on building owned by business
  • Business loan interest
  • Investment expense and interest
• Professional fees
  • Lawyers, accountants, and consultants
  • Tax preparers
• Office supplies
  • Pens, paper, staples, and other consumables
• Rent expense
  • Office space rent
  • Business-use vehicle lease expense
  • Other
• Office-in-home
  • Square footage of office space
  • Total square footage of home
  • Hours of use, if operating an in-home daycare
  • Mortgage interest or rent paid
  • Homeowner’s or renters’ insurance
  • Utilities
  • Cost of home, cost of separate improvements and first date of business use
• Wages paid to employees
• Employee benefit expenses
• Other expenses
  • Repairs, maintenance of office facility, etc.
  • Estimated tax payments made (including property taxes and sales taxes if applicable)
  • Other business-related expenses
  • Health insurance: Whether you’re a sole-proprietor who is covering their family, a partner or you have S corporation shareholders, you’ll want to account for premiums paid on behalf of those individuals. Also, you should gather information on your spouse’s employer provided insurance if applicable.
• Information about 2021 COVID-19 related grants, economic injury disaster loans (EIDLs), or paycheck protection program (PPP) loans. See CARES Act tax information for Small Businesses.

Advance payment notices

• Stimulus (Economic Income Payments) recipients: look for IRS Letter 6475. Review details about IRS Letter 6475.
• Advance Child Tax Credit payment recipients: look for IRS Letter 6419. Review details about IRS Letter 6419.

Tasks that should be completed

Make sure you’ve completed all related tax issues such as:

• File Form 1099-NEC and Form 1096
• File Form W-2 and Form W-3
• File federal and state payroll returns (Form 940, 941)

Other items
Make sure you’ve gathered related information such as:

• Any financial statements generated by the business such as a balance sheet, profit/loss statement or cash flow statement
• Completed year-end books
• Information regarding any charitable contributions
• Information regarding NOLs

S Corporations—Form 1120S

Documents

• IRS acceptance letter of S election or previously filed Form 2553
• A copy of the business’ bylaws and articles of incorporation
  • If an LLC taxed as an S corporation, copies of the LLC articles of organization and operating agreement
• List of federal and state employer identification numbers (EINs)
• If the corporation used to be a C corporation, any information carried over after converting to an S corporation
• Last year’s Form 1120S and Schedules K-1 and any state or local returns

Shareholder information

• Name, address and SSN/EIN of all shareholders during the year
• The number of shares that each shareholder owns
• Information regarding any:
  • capital contributions, distributions or loans to shareholders.
  • reasonable compensation paid to any employee/shareholder
  • insurance plan provided to any shareholder
  • changes in ownership throughout the year

Additional items for your small business checklist

Make sure you’ve completed all related tax issues such as:

• File Form 1099-NEC and Form 1096
• File Form W-2 and Form W-3
• File federal and state payroll returns (Form 940, 941)