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	Community Accounting & Tax, LLC., Chester, Virginia, Serving Metro Richmond and Southside Virginia.
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	TAXTIME - BUSINESS CLIENTS

		Business clients are under an additional burden, in that they must keep a set of records that clearly establish all revenues (gross receipts) and items of expense. While the IRS and State governments do not say just “how” this is to be done, customary practice is to keep a set of books, either paper or, via computer. We suggest that our clients keep their books on computer, using Quickbooks®. If you don’t have a payroll, then Quckbooks Basic™ is sufficient. Its also the least expensive product in the Quickbooks® series of programs. If you have a small business, you can also have your books on a spreadsheet, like Excel®. However, be aware that whatever method you use, you must assure your books are clear and concise.

		WHAT THE IRS SAYS:

			Everyone in business must keep records. Keeping good records is very important to your business. Good records will help you do the following: Monitor the progress of your business Prepare your financial statements Identify source of receipts Keep track of deductible expenses Prepare your tax returns Support items reported on tax returns Monitor the progress of your business You need good records to monitor the progress of your business. Records can show whether your business is improving, which items are selling, or what changes you need to make. Good records can increase the likelihood of business success. Prepare your financial statements You need good records to prepare accurate financial statements. These include income (profit and loss) statements and balance sheets. These statements can help you in dealing with your bank or creditors and help you manage your business. An income statement shows the income and expenses of the business for a given period of time. A balance sheet shows the assets, liabilities, and your equity in the business on a given date. Identify source of receipts You will receive money or property from many sources. Your records can identify the source of your receipts. You need this information to separate business form nonbusiness receipts and taxable form nontaxable income. Keep track of deductible expenses You may forget expenses when you prepare your tax return, unless you record them when they occur. Prepare your tax return You need good records to prepare your tax returns. These records must support the income, expenses, and credits you report. Generally, these are the same records you use to monitor your business and prepare your financial statement. Support items reported on tax returns You must keep your business records available at all times for inspection by the IRS. If the IRS examines any of your tax returns, you may be asked to explain the items reported. A complete set of records will speed up the examination.


	DUE DILIGENCE

	All accountants must exercise what’s called due diligence. Due diligence is the effort a party makes to avoid harm to another party. Failure to make this effort is considered negligence. Accountants need clear and concise financial information to assure you do not pay more tax than you should and, at the same time, that the government is not paid too little. This balancing act cannot be accomplished without a client providing us with their financial records for review. A profit and loss sheet from your records is not good enough. We need to review and apply the necessary tests to insure you did not make mistakes and incorrectly report either revenues or expense.

	One of the biggest single problems we see is that clients put too much faith in their computer. An accounting program on your computer uses “fuzzy logic” and “artificial intelligence” in many cases to give you accounting advice. While this may give you a sense of comfort, it could (and many times does) lead to disastrous consequences at tax time.

			*Quickbooks® nor any other accounting program are substitutes for good accounting advice !*

	We will need to review all your information prior to preparing your business tax return. Click here for a checklist of what you will need to bring. Additionally, we urge clients to bring their completed information in by Mid-November and no later that the first week in December. If you have a tax liability, we will be able to suggest legal ways to avoid some or all of it. One way this can be done is by purchasing business assets prior to the end of the year. However, after December 31, you are out of luck.

		BUSINESS TAX DEADLINES:

	Business Financial Tax Reviews - by Mid November 2005 Forms W-2; information must be furnished us by January 10, 2006 - forms must be mailed to employees by January 31, 2006 Forms 1099; information must be furnished us by February 10th, 2006 - and must be mailed to recipients not later than February 28th, 2006 Corporate, Partnership and multi-member LLC tax return information must be furnished us no later than February 20th, 2006. If we have not reviewed your books in November or December 2005, you will most likely be put on extension. The returns are due March 15, 2006. Sole Proprietorship’s are required to file the Schedule C with their personal tax return by April 17th, 2006. The same is true for “single-member” LLC’s Business License requirement deadlines, unfortunately, vary from county to county. The same is true for business tangible personal property tax returns. We cannot complete either unless we have completed your tax returns! We prepare business license and tangible personal property tax returns as a part of business engagements at no additional charge.

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	© 2002-2006 Community Accounting & Tax, LLC - All Rights Reserved Our Web Site provides our clients and visiting friends with information about taxes. Do not apply this general information to your specific situation without additional details and/or professional assistance.