To file your small business return, your accountant needs proof of what you earned, what you spent, what you own, and what you owe. That means gathering entity paperwork, last year’s returns, an income summary tied to your bank deposits, categorized expense records, payroll and contractor filings, sales tax returns, records of any assets you bought or sold, and documentation of anything you personally put into or took out of the business. What to give your accountant for small business taxes comes down to those buckets, and the more organized your handoff, the less time gets spent sorting paper and the more gets spent finding deductions.
Business Identity and Last Year’s Returns
Start with what identifies the business. Your legal business name, current address, and federal Employer Identification Number.1Internal Revenue Service. Instructions for Form SS-4 If you operate as an LLC, partnership, or corporation, include the formation documents: articles of incorporation, operating agreement, or partnership agreement. Those confirm entity type and ownership percentages, and both drive how the return gets filed.
Hand over your complete federal and state returns from the prior year. Your accountant uses them to pick up carryforwards like net operating losses and unused credits. Flag anything that changed during the year: new partners, shifted ownership percentages, capital contributions, or a change in accounting method. Switching from cash to accrual (or the reverse) requires Form 3115, and your accountant needs to know before starting the return, not after.2Internal Revenue Service. About Form 3115, Application for Change in Accounting Method
Income Records
Pull a profit and loss statement from your accounting software covering the full tax year. Total revenue on that statement should match the deposits across your business bank accounts and merchant processors. If it doesn’t, reconcile the gap before your meeting; investigating the difference goes on your bill.
Then collect every information return third parties sent you. The IRS already has copies, so nothing can be missing:
- Form 1099-K from payment processors like PayPal, Stripe, and Square. These arrive when gross transactions exceed $20,000 across more than 200 transactions, though you may receive one below that threshold.3Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
- Form 1099-NEC from any business that paid you $600 or more for services.4Internal Revenue Service. About Form 1099-NEC, Nonemployee Compensation
- Form 1099-INT from banks paying at least $10 of interest on business savings or money market accounts.5Internal Revenue Service. About Form 1099-INT, Interest Income
Document non-routine income separately: equipment sales, insurance payouts for property damage or business interruption, anything outside your normal revenue stream. Every gross receipt needs to be traceable to a source document. The IRS requires it, and your accountant can’t defend a number they can’t verify.6eCFR. 26 CFR 1.6001-1 – Records
Operating Expenses, Organized by Category
This is where most of the deduction value lives. Hand over expenses grouped by category, not as a stack of receipts. Every deduction needs to be ordinary and necessary for the business, and clear categorization makes that case.
Cost of Goods Sold
If you sell physical products, your accountant needs your beginning-of-year inventory value, end-of-year inventory value, and receipts for all products or raw materials purchased during the year. Note your inventory valuation method (FIFO, LIFO, or another), since switching mid-stream has tax consequences. The calculation lands on Form 1125-A and reduces gross profit before any other deductions apply.7Internal Revenue Service. About Form 1125-A, Cost of Goods Sold
Overhead and Professional Services
Pull documentation for recurring costs: rent or lease payments, utilities, office supplies, business insurance premiums, and software subscriptions used for business. Fees paid to lawyers, bookkeepers, or a prior tax preparer are also deductible. Each needs a clear business purpose. A personal streaming subscription isn’t deductible; a CRM you use to manage clients is.
Loan Interest
Provide year-end statements for every business loan, line of credit, and business credit card. Only the interest portion is deductible, so the statements need to break interest out separately from principal. If you used a personal card for business purchases, separate those transactions and their interest charges before handing anything over. Mixed use on a single card creates work, and flagging it early saves time.
The Substantiation-Heavy Categories
Vehicle Expenses
Two methods, two different sets of records. Under the standard mileage rate, the IRS allows 72.5 cents per business mile in 2026.8Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile For that method you need a mileage log showing date, destination, business purpose, and miles for each trip. Phone apps handle this cleanly if you start tracking at the beginning of the year.
Under the actual expense method, you instead deduct the business-use percentage of fuel, insurance, repairs, registration, and depreciation. That means keeping every receipt and tracking both business and total miles. The actual method often produces a larger deduction for expensive vehicles, but the recordkeeping is heavier. Either method gets reported on Form 4562.9Internal Revenue Service. About Form 4562, Depreciation and Amortization
Meals and Business Gifts
Business meals are deductible at 50% when they have a clear business purpose and you or an employee are present.10Office of the Law Revision Counsel. 26 US Code 274 – Disallowance of Certain Entertainment, Etc., Expenses For each meal, your records need date, amount, who attended, their relationship to the business, and what was discussed. A credit card statement alone won’t cut it. Entertainment costs like concert or sporting event tickets are not deductible even if you talked business during the event.
Business gifts to clients, vendors, or other individuals are deductible up to $25 per recipient per year.10Office of the Law Revision Counsel. 26 US Code 274 – Disallowance of Certain Entertainment, Etc., Expenses The cap hasn’t moved since 1962. Keep a record of recipient and cost. Incidental costs like engraving or wrapping don’t count toward the $25.
Home Office
If you use part of your home exclusively and regularly as your main place of business, you can claim the deduction. Your accountant needs the total square footage of your home and the square footage of the dedicated office. The ratio sets what percentage of mortgage interest, property taxes, utilities, and homeowner’s insurance you can deduct.
A simplified method is available: $5 per square foot of office space, up to 300 square feet, capped at $1,500.11Internal Revenue Service. Simplified Option for Home Office Deduction It cuts recordkeeping but usually produces a smaller deduction for larger offices. Your accountant can run both and use whichever is higher.
Asset Purchases, Sales, and Depreciation
Equipment, furniture, vehicles, and other assets that last more than a year generally can’t be deducted in full the year you buy them. The cost gets spread across the asset’s useful life under the Modified Accelerated Cost Recovery System.12Internal Revenue Service. Topic No. 704, Depreciation For every asset purchased during the year, your accountant needs the purchase date, total cost, and a description.
Two accelerated options can speed the deduction. Section 179 lets you expense the full purchase price of qualifying assets in the year they’re placed in service, up to $2,560,000 for tax years beginning in 2026, with the deduction phasing out once total purchases exceed $4,090,000.12Internal Revenue Service. Topic No. 704, Depreciation Bonus depreciation, recently restored to 100%, allows an immediate write-off of qualifying property with no dollar cap and can create a net loss.
For any asset you sold or disposed of, provide the sale price, date, original cost, and accumulated depreciation. Selling a depreciated asset often triggers depreciation recapture, taxed as ordinary income rather than at capital gains rates. Forgetting to report a disposal doesn’t make it vanish; it means the IRS catches it later.
On the debt side, provide year-end balance statements for all business loans and any new or refinanced loan agreements. If you lease major equipment, bring those agreements too. Your accountant needs to determine whether an arrangement is a true operating lease or effectively a financed purchase, because the tax treatment differs.
Payroll and Contractor Records
If you have employees, provide summary payroll reports showing total wages paid, federal and state income tax withheld, and the employer share of Social Security and Medicare. Those figures must match your quarterly Form 941 filings.13Internal Revenue Service. About Form 941, Employers Quarterly Federal Tax Return Include copies of every W-2 you issued.14Internal Revenue Service. Filing Forms W-2 and W-3 Separately, include Form 940, which reports your annual Federal Unemployment Tax obligation. Form 940 covers unemployment tax only; it is not a reconciliation of income tax withholding.15Internal Revenue Service. About Form 940, Employers Annual Federal Unemployment (FUTA) Tax Return
For contractors, you’re required to issue Form 1099-NEC to anyone you paid $600 or more for services during the year.4Internal Revenue Service. About Form 1099-NEC, Nonemployee Compensation Give your accountant copies of every 1099-NEC you issued and confirm they were filed on time. Late penalties are assessed per form and escalate: $60 per form within 30 days of the deadline, $130 per form through August 1, and $340 per form after that.
If you provide benefits like health insurance or retirement plan contributions, document them. Employer contributions to health insurance and qualified retirement plans are deductible, but they require specific reporting on the employee’s W-2 and on the business return.
Sales and Use Tax Filings
If your business collects sales tax, provide sales tax returns for every jurisdiction where you file, along with records showing total taxable sales and tax collected in each. Businesses selling across state lines often have filing obligations in multiple states under economic nexus rules, and missing even one jurisdiction can produce penalties and back-tax assessments during an audit.
Keep a current list of every state where you’re registered, along with registration dates. If you collect exemption certificates from wholesale buyers or tax-exempt organizations, make sure they’re complete and accessible. An incomplete or expired certificate shifts the tax liability from the buyer back to you. Review these periodically, because changes in a buyer’s name, address, or ownership can void a previously valid certificate.
Also give your accountant documentation of any use tax owed on purchases where sales tax wasn’t charged, such as equipment bought from an out-of-state vendor that didn’t collect your state’s tax. It’s one of the most commonly overlooked obligations, and auditors look for it.
Owner Draws, Estimated Payments, and Personal-Return Overlap
For sole proprietorships, partnerships, and S corporations, the business and personal returns are connected. Your accountant needs a clear record of every dollar you took out (draws or distributions) and every dollar you put in (contributions). These don’t directly affect taxable income, but they determine your tax basis. For S corporation shareholders, distributions that exceed basis become taxable capital gains, so accurate tracking matters more than most owners realize.
Provide proof of all federal and state estimated tax payments made during the year, including dates and amounts. Those payments offset your final bill and protect you from underpayment penalties.16Internal Revenue Service. Topic No. 306, Penalty for Underpayment of Estimated Tax
If you’re a sole proprietor or general partner, you owe self-employment tax on net business income on top of income tax. It covers both halves of Social Security (12.4% on earnings up to $184,500 in 2026) and Medicare (2.9% on all earnings, plus an additional 0.9% above $200,000 for single filers).17Social Security Administration. Contribution and Benefit Base Your accountant calculates it on Schedule SE.18Internal Revenue Service. Instructions for Schedule SE (Form 1040)
Self-employed individuals who pay their own health insurance can deduct those premiums as an above-the-line deduction on the personal return, not as a business expense. It’s calculated on Form 7206 and reported on Schedule 1 of Form 1040.19Internal Revenue Service. Instructions for Form 7206 Bring documentation of every premium paid, including coverage for your spouse and dependents.
Retirement plan contributions offer some of the largest deductions available to small business owners. A SEP IRA contribution can reach 25% of net self-employment earnings or $72,000 for 2026, whichever is less.20Internal Revenue Service. SEP Contribution Limits (Including Grandfathered SARSEPs) For a Solo 401(k), the 2026 employee elective deferral is $24,500, plus an employer profit-sharing contribution up to 25% of compensation. Owners aged 50 and older can add an $8,000 catch-up; those aged 60 through 63 qualify for an $11,250 catch-up instead.21Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026 Bring your contribution statements and plan documents.
Deadlines to Work Backward From
Missing a deadline turns tax planning into damage control. For calendar-year businesses filing in 2026:
- Partnerships (Form 1065) and S corporations (Form 1120-S) are due March 16, 2026. A six-month extension via Form 7004 moves the deadline to September 15, 2026.22Internal Revenue Service. Publication 509 (2026), Tax Calendars
- C corporations (Form 1120) are due April 15, 2026, extended to October 15, 2026.22Internal Revenue Service. Publication 509 (2026), Tax Calendars
- Sole proprietors (Schedule C with Form 1040) are due April 15, 2026, extended to October 15, 2026.
An extension gives you more time to file but not more time to pay. If you owe, you still need to estimate and pay by the original deadline. Partnerships and S corporations also face a per-partner or per-shareholder penalty for late filing that accumulates monthly, so getting your documents to your accountant well before the deadline pays for itself.
What to Keep After Filing
Don’t throw anything away once the return is filed. The IRS can audit for three years from the filing date under normal circumstances. If you underreported income by more than 25%, the window extends to six years. If you claimed a deduction for worthless securities or bad debt, keep those records for seven years.23Internal Revenue Service. How Long Should I Keep Records
Employment tax records have their own rule: four years from the date the tax was due or paid, whichever is later.24Internal Revenue Service. Recordkeeping Digital copies are acceptable as long as they’re legible and you can produce them on request. A folder of scanned receipts organized by category and month beats a drawer of faded paper every time.