Three things your accountant wants you to know

by Judy Artunia, National Federation of Independent Business


Are you among the throngs of small business owners who do a mad scramble during the next month or so to get your company’s financial records in order? Those last minute calculations and paperwork searches can be just as stressful to your accountant as they are to you. If you are still in tax prep mode for your 2005 return, there may still be time to help your CPA complete your return by April 15 (or March 15 if you have a C or S corporation).

1. Keep clean financials.

At this late stage, it’s all about being organized and responsive. For instance, make sure your financial statements balance. “You wouldn’t believe how many clients have messy financials,” says CPA Andy Mattson, a tax partner at Mohler, Nixon & Williams in Campbell, Calif.

If your CPA doesn’t know that you hired a salesperson in Texas last year, you can’t expect him to file the necessary out-of-state tax returns. When your accountant asks for additional documents, such as a list of out-of-state employees, send them immediately.

2. Plan ahead for next year.

Now is the time to make tax wise decisions for 2006. If you’re not sure where to start, set an appointment to talk to your CPA about tax strategies. CPA Patricia Thompson, a tax partner at Piccerelli Gilstein & Company LLC in Providence, R.I., advises reviewing your quarterly estimated tax requirements early to avoid penalties. “For instance, figure out what your capital additions will be for the year so you can determine your estimated tax payments,” she says.

Throughout the year, talk to your CPA before you buy or sell an asset or undertake other major transactions, so that you know how best to proceed from a tax standpoint.

3. Document carefully.

Watch your record keeping, even when you're on the road. If you use the same vehicle for business and personal travel, pay close attention to your mileage. “Some clients keep contemporaneous records. At the end of the year, they don’t know what percentage of their mileage was for business,” says CPA Joe Scutellaro, a partner at Jump Scutellaro & Company in Toms River, N.J.

If you aren’t already using a bookkeeping program, such as Intuit’s QuickBooks, start now, Scutellaro says. He recommends builders and others who track projects invest in a more sophisticated software, such as a Peachtree accounting program.

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