Tax Time: Prepare for your Accountant Meeting

By the beginning of the year you want to be ready to meet with your accountant, providing all that he or she needs to complete your tax return. Here are some useful tips, especially for Internet businesses.

1. Using your accounting software (Quickbooks, Quicken, or other), print out a detailed P&L, and review all the expenses in the various categories. Make any changes now for items that may have been miscategorized.

2. Review all the sources of income for your business. Make sure that you have tracked all your Google Adsense and any other advertising income.

3. Double check that you are accounting for paid traffic correctly. This paid traffic will offset your income.

4. If you have hired contractors to create content for your Internet site, be sure that you have the amounts paid correctly entered in your accounting system. (And don’t forget to queue up the 1099’s for them.)

5. Many on-line businesses are small enough to run without office space. If you are running your business from your home, make sure that you understand how the home office gets deducted on your personal income statement. You will need to know the square footage of your entire home, and the percentage that your office takes up.

6. Double check that all the expenses have been accounted for. This includes the small items, such as postage and office supplies, as well as the bigger items, such as computers and servers.

7. Make a list of items that you want to discuss with your accountant. The fuzzy or complicated areas can include education expenses, membership dues, taxes you have paid, and Internet expenses.

8. Be sure that you have reviewed your own P&L and really understand it before you go in. Did you make money or lose money? Do you understand why?

Taking time in advance of your meeting with your accountant insures that you get your questions answered, and the accountant can do the best job possible on your return. Here’s an interesting article that talks a bit more about meeting with your accountant. Working with your Accountant