Small Business Tax
Prep Checklist

Small Business Tax Checklist

Rely on your team of Block Advisors certified small business tax pros—a part of H&R Block—to get your taxes right and keep your business on track. That starts with understanding your small business’ taxes.

To help you feel confident about your business taxes, we’re here for you throughout the year and at tax time when you’re ready to prepare your business return.

We’ve outlined a small business tax preparation checklist for 2020, so you can gather what you need.

Running your business on your own? You’ve come to the right place—you can also use this as a self-employed tax checklist.

Income

Be sure to include all income sources when creating your small business checklist. This could include income from your day-to-day operations as well as any investment or ancillary income.

• Gross receipts from sales or services
• Sales records for accrual-based taxpayers (accounts receivable)
• Returns and allowances
• Business checking/savings account interest (1099-INT or statement)
• Other income, including rental income, federal and state gasoline or fuel tax credit or refund

Cost of Goods Sold

Some categories may not apply each tax season, so you should only include what applies for 2020 on your small business tax checklist. If you produce, purchase, or sell merchandise in your trade or business, you’ll need to take your inventory into account at the beginning and end of the year.

• Beginning inventory total dollar amount
• Inventory purchases
• Ending inventory total dollar amount
• Items removed for personal purposes
• Materials and supplies

Expenses

A wide range of costs can fall under applicable business expenses. Don’t miss recording any of these on your small business tax preparation checklist. Our tax pros will help you find each and every deduction you deserve.

• Advertising
• Phones (landline, fax or cell phones related to business)
• Computer & internet expenses
• Transportation and travel expenses
  • Local transportation – Did you take any business trips this year? You’ll want to include your mileage along with any car and truck expenses. For public transportation, parking and tolls, you should include your contemporaneous log (recording of transactions as they happen) or receipts.
  • Travel away from home – You should account for mileage or actual expenses if you drove – or airfare for any flights. Be sure to include costs for hotels; meals and tips; and taxi fares and tips. Remember to include any miscellaneous expenses, such as your internet access (hotel, internet café, etc.).
• Commissions and fees
• Contract labor expenses paid to subcontractors and independent contractors
• Depreciation
  • Cost and first date of business use of assets
  • Records relating to personal use of assets
  • Sales price and disposition date of any assets sold
  • Documentation of prior-year depreciation
• Amortization of intangible assets (e.g., patents or copyrights held)
• Business insurance
  • Casualty loss insurance
  • Errors and omissions
  • Other
• Interest expense
  • Mortgage interest on building owned by business
  • Business loan interest
  • Investment expense and interest
• Professional fees
  • Lawyers, accountants, and consultants
• Office supplies
  • Pens, paper, staples, and other consumables
• Rent expense
  • Office space rent
  • Business-use vehicle lease expense
  • Other
• Office-in-home
  • Square footage of office space
  • Total square footage of home
  • Hours of use, if operating an in-home daycare
  • Mortgage interest or rent paid
  • Homeowner's or renters' insurance
  • Utilities
  • Cost of home, cost of separate improvements and first date of business use
• Wages paid to employees
• Employee benefit expenses
• Other expenses
  • Repairs, maintenance of office facility, etc.
  • Estimated tax payments made (including property taxes and sales taxes if applicable)
  • Other business–related expenses
  • Health insurance – Whether you’re a sole–proprietor who is covering their family, a partner or you have S corporation shareholders, you’ll want to account for premiums paid on behalf of those individuals. Also, you should gather information on your spouse’s employer provided insurance if applicable.
• Information about 2020 COVID-19 related grants, economic injury disaster loans (EIDLs), or paycheck protection program (PPP) loans. See CARES Act tax information for Small Businesses.

Small Business Checklist – Additional tasks

Make sure you’ve completed all related tax issues such as:

• File Form 1099-NEC and Form 1096
• File Form W-2 and Form W-3
• File federal and state payroll returns (Form 940, 941)