3.1 C
New York
March 31, 2023

What Is The Reason An Accountant Needs So Much Information To Prepare Annual Accounts For A Limited Company?

We are often asked by our clients what information is required to draft their annual accounts. You will need to detail all outgoing and incoming expenses, heedless of whether you are a limited company or a sole trader.

Tax returns are one of the most difficult financial tasks you will have to deal with each year. This is especially true if you are self-employed or run your own company. Filing taxes can become complicated due to complex codes, ambiguities, and multiple rules that vary depending on the situation.

The company annual accounts service London experts can help you save a lot of time and effort by helping you with your taxes. Here is some basic information you should give your accountant. You may be asked for additional documents that you need.

1. Information about identification

An accounting services London company will need certain information from you to authorize your identity in order to draft your taxes. The social security number assigned to you and your dependents will be required by your accountant. Each year, the IRS shares several tax returns back to taxpayers because of the social security numbers.

Clients may need to provide a secondary form of identification, such as a military ID, driver’s license, or any other state-issued photo ID card.

2. Latest Tax Return

Although you might not be eligible for the same tax write-offs or deductions as last year’s, giving your accountant the previous year’s tax return will allow them to easily access the details and calculate certain deductions. This could be an opportunity to talk with your new accountant about any discrepancies between tax returns in the past and how you should approach them.

3. Employers’ Tax and Wage Statements

Employers will provide a W-2 tax statement and a wage form to employees. Employees who have not received the details from their employers by January 31 should go to the office and check for any errors.

Freelancers and independent contractors should be provided with a Form 1099-MISC by all clients for which they worked during the year.

4. Income Statements

What about other income sources? You might have earned interest and dividends from unemployment income, investments, or social security income. You should be able to receive statements from each source of income, if applicable. These statements will also need to be provided to the accountant.

5. Documentation of Real Estate Holdings

If you own real estate, there are many deductions that you may be eligible for. You should bring any documents that are related to a recent home purchase, as well as evidence of mortgage interest payment, payment of home equity loans, or payment of real estate and personal property taxes.

6. Documentation of expenses

You must provide documentation that shows your expenses for the tax year you are filing taxes to get your credits or deductions. Your accountant will need invoices, receipts, and other documentation. It is better that you have more than enough documentation and details that can help you get ahead with annual accounts without any hassle. 

Detailed Checklist and Documents Most Often Required

  1. Record of Petty Cash
  2. If you still write cheques, keep a record of your cheques in a book called a checkbook.
  3. Bank statements for business accounts
  4. Receipts and invoices for purchase
  5. Stock value
  6. Payroll records
  7. Sales income records
  8. Finance agreements
  9. Statements from credit cards
  10. Other expenses that weren’t directly paid by the business
  11. Statements on loans
  12. Drawings and dividends paid to shareholders
  13. Assets that were scrapped or sold
  14. Purchases of equipment and assets during the past year
  15. Mileage records
  16. Copies of returns on vat submitted in the past year

We don’t need to see all the documents if you’ve done your books yourself or have a bookkeeper who did it for you. We will need access to online accounting software and your complete and reconciled accounts, including the profit, trial balance, losses, and balance sheet. If applicable, we will need to see your payroll records and copies for VAT returns.

Share Your Personal Details

A personal tax organizer is available every year. Using a checklist can help ensure that all necessary information is included in your self-assessment tax return. Below is a list of information that you might need:

  1. If you were employed in the tax year, P60 will be deducted from your earnings
  2. Information about any pension income
  3. Rent income – Detail of your rental income, expenses, and income from property rentals
  4. If you quit your job in the tax year, P45 will be deducted from your employment
  5. Your employment will provide you with P11d
  6. Information about capital gains (purchase or sale of assets like property, shares, etc.)
  7. Information about any savings income

Last Words

This information can be provided electronically or in writing. Both are possible, but we need to know which one you prefer.

To prevent a last-minute rush, it’s advisable for clients to maintain regular records of their finances. It is also easier to send your documents to us on time to meet your year-end submission deadline. To learn more about this topic, you can always connect with the experts in accounting services London. They can provide you with all the necessary details and help you increase the chances of completing the process without any hassle.

Related posts

You want to Get Canada Visa For The Citizens Of Belgium


You want Taiwan evisa for Turkey people’s ?


Price Trends of White Wine in its Latest Insights and Dashboard

Stampa Prints

Leave a Comment