Bookkeeping is an essential element of financial management for all businesses, and it is the foundation for all other financial aspects of the company. Having a well-defined bookkeeping workflow is crucial to ensure that financial information is accurate, deadlines are met, cash flow is accurate, and nothing is missed. The following is a checklist of tasks that should be included as part of a bookkeeping workflow, organized by frequency:

Daily Tasks:

1. Review cash position (business bank account balances and petty cash)
2. Record and categorize all incoming and outgoing payments
3. Deposit all cash and record the deposit

Weekly Tasks:

1. Prepare and send invoices, including a due date
2. Pay vendors and review accounts payable
3. File copies of invoices, cash payments, and cash receipts
4. Review projected cash flow

Monthly Tasks:

1. Balance and reconcile business accounts
2. Process payroll, withholding, and depositing taxes
3. Check inventory status of office supplies
4. Review past due receivables, send reminders to customers
5. Compare income and expenses to budget

Quarterly Tasks:

1. Review financial statements and identify trends
2. Review expenses for necessary adjustments
3. Plan for upcoming tax payments

Annual Tasks:

1. Prepare and file tax returns
2. Review and update the budget for the upcoming year
3. Perform an end-of-year financial review

Note: The above list is not exhaustive and the task may vary depending on the nature of the business. Additionally, having an efficient bookkeeping system can help ensure that financial planning problems do not cause a business to fail. It is highly encouraged to seek help from a Bookkeeper, accountant or financial management expert if needed.

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Partnership Tax Checklist When filing taxes for a business registered as a partnership (or if you are a multi-member LLC filing as a partnership), you will need the following information and documents:

Partner Information:

• Partners’ names (exactly as they appear on their Social Security cards)
• Partners’ home addresses
• Partners’ SSNs or Employer Identification Numbers (EINs)
• Each partner’s ownership percentage (including profit and loss percentage, if different)
• Capital contributions, distributions, and other financial transactions for each partner
• Share of liabilities for each partner
• Insurance for each partner
• Liquidating payments for each partner
• Information about any changes in ownership or addition or loss of partners

Documents:

• A copy of your partnership agreement, including any amendments and bylaws (if you’re an LLC taxed as a partnership, you’ll need a copy of the LLC operating agreement and any articles of organization)
• A list of federal and state EINs
• Form 1065, including Schedules K-1
• State or local returns from the previous year

S Corporation Tax Checklist When filing taxes for a business registered as an S Corporation, you will need the following information and documents:

Shareholder Information:

• Shareholders’ names (exactly as they appear on their Social Security cards)
• Shareholders’ home addresses
• Shareholders’ SSNs or EINs
• Number of shares that each shareholder owns
• Capital contributions, distributions, or loans for each shareholder
• Reasonable compensation paid to any shareholder
• Insurance for each shareholder
• Information about any changes in ownership throughout the year

Documents:

• Acceptance letter from the IRS for S corporation status (or previously filed Form 2553 requesting this filing status)
• Bylaws and articles of incorporation, or an LLC Operating Agreement and articles of organization (if an LLC electing to be taxed as an S Corp)
• A list of federal and state EINs
• Any information carried over if converted from C Corporation to S Corporation
• Form 1120-S, including Schedules K-1
• State or local returns from the previous year

General Self-Employed Tax Checklist

If you are a sole proprietor or single-member LLC, it is important to collect all necessary information, income items, and deductions before filing your taxes. To ensure that your taxes are filed properly, you will need to gather the following information and forms:

Personal Information:

• Your name (exactly as it appears on your Social Security card)
• Your date of birth
• Your Social Security number (SSN)
• Your home address
• A copy of your federal and state tax returns from the previous year
• Your bank account number and routing number (for direct deposit of your refund, if applicable)

Income:

• 1099-K forms received from third-party payment processors such as PayPal or Venmo
• 1099-NEC forms received from clients for independent contract work
• Other 1099 forms for investment earnings (1099-INT, 1099-DIV) or broker-handled transactions (1099-B)
• W-2 forms for any employment income
• Gross receipts from sales
• Accounts receivable (sales records)
• Any returns or allowances
• Other income, such as rental income or tax credits received

Deductions:

• The cost of goods sold (beginning and end-of-the-year inventory amount, inventory purchases, materials, and supplies)
• Advertising and marketing costs
• Phone expenses (landline, fax, business cell phone)
• Computer and internet expenses
• Business use of a personal car, either as a total expense deduction or mileage deduction
• Travel expenses
• Meals for business purposes
• Commissions and fees
• Software subscriptions
• Depreciation of business assets
• Contract labor costs
• Insurance
• Loans and interest payments
• Office space outside of the home
• Home office (calculate square footage of home office space against total square footage of home and total mortgage interest or rent paid)
• Employee wages
• Estimated tax payments
• Other business-related expenses such as repairs and maintenance

Forms to File:

• Form 1099-NEC for any independent contractor paid $600 or more
• W-2 forms for any employees
• Form 1040, including Schedule C for sole proprietors and Schedule SE for self-employment tax calculation.

Dear Client,

We are very excited to be preparing your tax return this year. In order to smooth the data collection process, we have created a checklist of information we will need to complete your return. Please note that not all items will apply to everyone.

We will need to receive your documentation by April 1st in order to complete your return by April 15th. If we receive your information after this date, we will file an extension for your return and reach out to you after the April 15th deadline to complete the return.

If you have any questions, please contact me by email or phone. 

Best,

Bright Hill Advisors

• Personal information:
  • Full names of the taxpayers
  • Dates of birth
  • Social security numbers
  • Address
• Dependent information:
  • Names
  • Dates of birth
  • Social security numbers
  • Relationship
  • Whether the taxpayer has full custody of the children or if they split custody
• Income:
  • Wages (W-2s)
  • Investment income:
    • Interest income (1099-Int)
    • Dividend income (1099-Div)
    • Capital gains (1099-B)
    • Reports for any cryptocurrency transactions
  • Business income and expenses (for sole proprietors)
    • Revenue
      • Copies of any 1099-NEC received
      • Total for income not included on 1099-NECs
    • Expenses:
      • Automobile expenses
      • Office supplies
      • Phone expenses
      • Interest expenses
      • Equipment
      • Legal and professional fees
      • Business meals and entertainment
      • Dues and subscriptions
      • Continuing education
      • Travel expenses
      • Other business expenses
  • Retirement income:
    • Pension income
    • IRA distributions
    • Social security income
  • Income and expenses for any rental properties
  • State tax refunds received
  • Unemployment compensation received (1099-G)
  • Alimony received (for divorces finalized prior to 12/31/2018)
  • Income from pass-through entities
    • K-1s from partnerships and s-corporations
    • Dividend income from c-corporations
• Adjustments to income:
  • Health insurance paid for self-employed individuals
  • Student loan interest
  • Educator expenses for teachers
• Deductions:
  • Medical expenses (if they will exceed 7.5% of the taxpayer’s income)
  • State taxes paid or sales tax paid in states without state income taxes
  • Property taxes paid
  • Personal property taxes such as DMV fees based on a vehicle’s value
  • Mortgage interest 
  • Mortgage balances if the mortgage balances are in excess of $750,000
  • Investment interest paid
  • Cash donations
  • Non-cash donations
    • Receipts are required if the total deposit is over $500
    • Vehicle donations require a 1098-C from the charity that received the vehicle
    • Items valued at more than $5,000 require an appraisal which must be submitted with the return
• Documentation for potential credits:
  • Invoices for solar panels
  • Purchase agreements for electric vehicles
  • Education expenses for higher education (1098-T) 
  • Foreign taxes paid (often listed on 1099-Div)
• Estimated tax payments (ask for a list of all payments made throughout the year along with dates)
• Other information needed to prepare and file the return:
  • Copy of the prior year’s tax return (to look for carryforwards)
  • Email addresses (if using electronic signatures)
  • Phone numbers 
  • Bank information if scheduling direct deposit of refunds or electronic payments of the taxes due
  • Documentation of health insurance coverage
  • Copies of any notices received from any taxing authorities
  • Personal identity theft prevention number from the IRS (if applicable)