Reconciled bank and credit-card accounts
Every active bank and credit-card account should be reconciled through the end of the reporting period. Reconciliation helps establish that the recorded cash activity agrees with independent statements and that duplicate or missing transactions have been addressed.
Old accounts should be reviewed before they are marked inactive. A zero online balance does not necessarily mean the QuickBooks account has been reconciled or properly closed.
A reviewed profit and loss statement
The profit and loss statement should be reviewed for unusual negative amounts, large uncategorized balances, personal expenses, duplicated income, and material year-over-year changes. Questions should be resolved while the underlying activity is still familiar.
Bookkeeping classifications support the handoff, but the tax preparer determines the tax treatment and any return-level adjustments.
A supportable balance sheet
Major balance-sheet accounts should have understandable balances. This includes loans, fixed assets, credit cards, payroll liabilities, sales-tax liabilities, accounts receivable, accounts payable, and owner or shareholder equity accounts.
Provide loan statements, purchase documents for major assets, year-end payroll reports, and explanations for significant owner contributions, draws, distributions, or personal payments.
Supporting documents and year-end reports
Common supporting records include December bank and credit-card statements, loan statements, payroll summaries, merchant-processor reports, fixed-asset invoices, and a list of accounts opened or closed during the year.
Depending on the business, the tax professional may request additional information. The bookkeeping file should make those follow-up questions easier to answer rather than replacing the tax professional’s document request.
A clear separation of responsibilities
The bookkeeper maintains and organizes the accounting records. The tax preparer evaluates tax positions, elections, return classifications, depreciation methods, and filing requirements. Clear boundaries reduce confusion and help both professionals work from the same reliable information.
Plutus provides bookkeeping services only and does not prepare tax returns or provide tax advice.
Frequently asked questions
Should the bookkeeper make tax adjustments before the handoff?
Bookkeeping corrections supported by the records can be completed, but return-level tax adjustments and tax classifications belong to the independent tax professional. The handoff should clearly separate bookkeeping work from tax decisions.
Which QuickBooks reports are commonly provided?
The tax professional often requests a profit and loss statement, balance sheet, general ledger, trial balance, and supporting account detail. The exact request varies by entity and engagement.
What if year-end bookkeeping is not finished?
Tell the tax professional what periods and accounts remain incomplete. Filing from unreconciled or changing records can create additional questions and amendments, so the completion status should be communicated clearly.
Practical checklist
- Reconciliations completed through year-end
- Profit and loss reviewed for unusual activity
- Balance-sheet accounts supported
- Loan, payroll, and major-asset documents gathered
- Owner transactions clearly identified
- Questions and unresolved items summarized
This guide provides general bookkeeping information. Plutus Bookkeeping LLC provides bookkeeping services only and does not provide tax-return preparation, tax advice, legal advice, or representation before tax authorities.