Prepare to meet your (return) maker

2007 is over.  It's time to tally up the score.  Most businesses get help some sort of help with their year-end tax and accounting, but many of them make the project more painful and expensive than it needs to be. 

If you want keep your tax prep costs down, you need to do some homework.  The better prepared you are at tax time, the quicker your work gets done, and the smaller the tax prep bill.  Congress has enacted new rules that hold tax preparers to higher standards on returns they sign this year, so your accountant may have more questions for you this year.  That makes it more important to have things in order at tax time. 

Here are a few things to keep in mind:

- Have your financial information in order. 
If you prepare your own internal financial statements, make sure they are final before you see the preparer.  Don't be making adjusting entries after telling the tax guy that your numbers are "final."

-Don't forget the balance sheet.

Don't expect to give your preparer nothing more than a list of income and expense items.  Preparers like to see a businesses balance sheet, too.  The only way to make sure that you haven't missed income or expense items is to make sure the income ties out to the beginning and ending balance sheet.

- Answer all of the questions your preparer sends you ahead of time. 

Most preparers provide their clients with a checklist or "organizer" to help gather information.  Use it, or he'll run up the clock tracking down the information you didn't round up.

- What's new? 

Did you open a new line of business?  Did you start doing business in another state?  Did you make some big change in your operations?  All of these can affect your tax returns.  Beat your preparer to the punch by asking him what information he needs about this stuff.

-Have the details. 

Your preparer will need to know what fixed assets you've bought; have the detail of your fixed asset accounts ready.  Have business life insurance?  The preparer will need to know what you've spent on it, and whether it has built up.  Have the detail for your charitable giving and travel and entertainment ready.

-Has the government been in touch? 

You should let your tax preparer know right away when you hear from the IRS, but if you have been saving your notices in a drawer, dust them off and get them to your tax preparer pronto.

-Be ready when your preparer arrives. 

It doesn't help anybody if your tax team is sitting in your conference room waiting for you to get your information together.   If something comes up and you won't be ready, give your preparer as much notice as you can.

Remember, it's cheaper for you to be the detective.  When the preparer asks for something, you can say "oh, it's all in there, you find it," she will, but you're paying for the detective work at professional rates.

For more on preparing for your tax return preparation, visit this piece on Getting Ready to File Your Corporate Tax Return.