What a preparer actually asks for
A preparer does not want your bank statements. They want what the statements have already been turned into. For a small business filing a Schedule C, an 1120-S or a 1065, the list is short and it is the same every year.
1. A trial balance, as of the last day of the tax year
Every account with its year-end balance, debits in one column and credits in the other, and the two columns equal. This is the one document a return is prepared from. If the columns do not tie, nothing else matters yet.
2. A profit and loss for the year
Revenue, cost of sales, expenses by category, net profit. Your preparer maps these lines to the return; the more consistent the categories, the less they have to ask.
3. A balance sheet as of year end
Cash, receivables, equipment, loans, what you have put in and taken out. For a sole proprietor it is optional on the return but your preparer still wants it; for an S-corp or partnership it is on the return.
4. A general ledger
Every posting in the year, by account, with a running balance. This is where a preparer goes when a figure looks odd; it answers "what is in this number" without a phone call.
5. Bank and card reconciliations
Proof that the cash on the books is the cash at the bank on 31 December, account by account. Without it, every other figure is a claim.
6. The 1099 list, with W-9s
Who you paid for services above the reporting threshold, by cheque, ACH or wire, and the W-9 for each. Card payments are excluded; the processor reports those. Due in January, before the return.
7. Fixed assets bought or sold
Anything over the capitalisation threshold: what, when, how much, and whether it was financed. Depreciation is the preparer's call, but they need the list.
8. Loans and owner money
Year-end balances on every loan, and what the owners put in and took out. Draws are not expenses, and contributions are not income; your preparer needs them separated.
9. Payroll reports, if you have employees
The year's W-3 and quarterly 941s from your payroll provider. These come from payroll, not from the books.
10. Receipts for the large or unusual
Not a shoebox. The ten or twenty items a preparer would ask about: the vehicle, the big equipment purchase, the legal settlement. Keep the rest, but nobody wants it on day one.
What Return Ready hands your CPA
Items 1 through 6 and 8, built from your statements and tied to the cent: the year-end trial balance (cut the way a closed year reads), the profit and loss, the balance sheet, the general ledger with running balances, and the 1099 worklist with the W-9s collected by link. They come as one Excel workbook, a four-column trial-balance CSV that tax software imports, and a QuickBooks file. Reconciliation is built in: cash on the books is cash on the statements, or the review page says which month is not covered. Fixed assets are flagged from the statements for your preparer to confirm. Payroll reports and receipts stay with you.
See what a CPA firm gets, or how the QuickBooks file imports.
Questions people ask
- Cash basis or accrual?
- Ask your preparer; it is their call and it depends on your entity and size. The books carry receivables, payables and prepayments where the business has them, so either basis can be reported from them.
- My CPA asked for a "year-end close". Is that the same thing?
- Close is the step after this list: posting the preparer's adjustments and moving the year's profit into equity so the next year starts clean. The list above is what they need to do the close.
- When should the books be ready?
- For a March 15 or April 15 deadline, preparers want books in January or February. Books that arrive in April get an extension, not a return.