Preparation for Your 2011 Tax Return

When it comes to preparing your 2011 tax return, there is no such thing as too much information. However, the line between being well-prepared and overwhelmed is a thin one. How do you collect and organize your 2011 tax essentials without wasting time and raising your stress level?

The documentation to gather in preparation for your 2011 tax return is a question every small business owner ponders. Some items are more important than others, though. Here are those essential items for your 2011 tax return:

-Last year's tax return. The first place to start when preparing your 2011 tax return is, last year's return. This essential document can not only provide a ballpark idea of what you can expect to pay (or the size of your refund) this year, but it can also save you a ton of time. Your past year's return is the foundation for preparing your 2011 tax return. It includes such valuable (and unchanged) information as a federal tax ID number, your business code number and the date you began your business. It'll also contain the deductions you used last year, many or all of which you may be able to take advantage of again this year.

-Bank and credit card statements. Preparation for your 2011 tax return is not complete without reliable and thorough bank and credit card statements. Good recordkeeping will make it significantly easier to complete your tax return, providing a convenient way to determine the overall income and deductions you can claim. And a year's worth of credit card statements will make it much easier to write off travel and other business expenses, especially if your statements provide an end-of-year summary that categorizes expenditures.

-If you don't have your most recent tax return handy, items such as articles of incorporation and a partnership agreement are 2011 tax essentials that help you establish the hierarchy and history of your small business. An article of incorporation will list the state in which your business was founded, a list of shareholders and a list of officers. Similarly, a partnership agreement will reveal when your partnership started, the identity of the partners and the money and percentage of ownership for each partner. Other vital information in a partnership agreement includes the way a business keeps track of its finances as well as income and expenses that aren't distributed based on ownership percentages, loss or profit.

-Vehicle information. If you and/or employees drive for business-related purposes, then this is also near the top of the list of what to add to the list in preparation for your 2011 tax return. Make sure to have handy the amount of miles that were driven on business as well as during commutes between workplaces.

There are many more factors to be aware of as you begin the preparation for your 2011 tax return, so before heading to your accountant to file this year's return, speak to him or her so that you have all the 2011 tax essentials in place before the filing process begins.

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