Every tax preparer has a version of the same January email, and every small business owner has a version of the same reaction to it. The list looks long, some of it sounds like the same thing twice, and a few items are questions only the owner can answer, which is precisely why they get left until last.
It is worth knowing what is on that list before it arrives, because the difference between a return prepared from closed books and a return prepared from a pile of statements is measured in both fees and accuracy. Here is what gets asked for, and why each piece matters.
The four things that do most of the work
A profit and loss statement for the full year, closed. Not a draft, not a version that changes if someone recategorizes a transaction next week. This is the backbone of the return, and if it moves after the return is drafted, the work gets done twice.
A balance sheet as of the last day of the year. Owners tend to think of the P&L as the tax document and forget this one, but the balance sheet is what tells a preparer your loan balances, your inventory, your fixed assets, what you owe in payroll and sales tax, and how much you took out of the business. Several of those numbers are required on the return itself.
A general ledger or transaction detail for the year, so anything unusual can be traced to a specific entry rather than argued about in the abstract. This is what turns a question into a thirty-second answer.
Year-end bank, credit card, and loan statements, with confirmation that every account is reconciled. A preparer who cannot confirm that the cash on your balance sheet matches the cash in your bank has no way to trust anything built on top of it, and the first thing they will do is rebuild it at their hourly rate.
The forms that arrive in January and get lost by February
Copies of every 1099-NEC you issued, and the summary showing who you paid. If you paid an unincorporated contractor $600 or more during the year for services, that form is generally required, and the deadline sits at the end of January, well before the return itself.
Every 1099 and tax form you received. 1099-NEC from clients who paid you, 1099-K from payment processors and marketplaces, 1099-INT from the bank, 1098 for mortgage interest if you have property in the business, and K-1s from any other entity you hold an interest in. These are reported to the tax authorities whether or not you remember them, so a missing one surfaces later as a notice rather than never.
Year-end payroll reports if you have employees: the W-2s and W-3, the quarterly filings, and the annual unemployment return. Payroll numbers on your P&L that do not match your filed payroll returns are one of the most common sources of a reconciliation request.
Anything from a state. Sales tax returns, franchise or annual report filings, and any notice you received during the year, including the ones you resolved. A preparer would rather see a notice you handled than discover one you did not.
The answers only you have
Some of this list is not paperwork. It is context that lives in the head of the owner and nowhere in the accounting system, and it is usually what holds the return up.
Fixed assets bought or sold during the year, with the date, the price, and what it was. Equipment, vehicles, and improvements are depreciated rather than expensed, and the options available depend on details that are not visible in a bank feed.
New loans, and what the money was used for. A deposit in your account could be revenue, a loan, an owner contribution, or a transfer, and the tax treatment of those four is completely different. The same applies in reverse to money you took out, where the distinction between an owner draw, a distribution, a repayment, and payroll matters a great deal.
Personal expenses that ran through a business account, and business expenses you paid personally. Both happen in every small business, and both need to be identified rather than quietly left where they landed.
Vehicle mileage, if you drive for work, and home office details if you claim one. Neither can be reconstructed from statements, because the records that support them are the log and the square footage, not the spending.
Why timing is the part that actually saves money
Tax preparers price partly on how much bookkeeping they have to do before they can start preparing. Closed, reconciled books arriving in January get a return prepared. A year of statements arriving in March gets a year of bookkeeping done at tax-preparation rates, during the six weeks of the year when that professional has the least time and the most leverage, and every question comes back to you at the worst possible moment.
There is also a planning cost that is easy to miss. Decisions that affect what you owe mostly have to be made before the year ends, and they can only be made by someone who knows what the year looks like. Books that are current in November make that conversation possible. Books assembled in March only describe a year that is already closed.
Evolv Bookkeeping is $199 per month flat. Every account reconciled to the statement, transactions categorized against a chart of accounts built for how your business actually runs, and your P&L and Balance Sheet closed and delivered by day 2 of the following month, so the statements your preparer asks for already exist. 1099 prep is included at year end.
If the last several months never got recorded, catching up a backlog is a flat $500 one time however far back it goes, done within 2 days and guaranteed in writing. No contracts, cancel anytime, and you can get an instant quote on our homepage.