Year End Tax Preparation Guide

In This Article…

You can use this guide to help you gather the documentation you will need to file your firm’s taxes. 

For further assistance, consult with your accountant or a CosmoLex Accounting Partner (CAP)

Year End Tax Preparation Guide

  1. Reconcile all bank accounts through December 31st.
  2. Run and Review these reports:

    Profit and Loss (P&L) Report
    • Review income accounts
    • Review expense accounts
    Balance Sheet Report
    • Review asset accounts, with special focus on Advanced Client Costs
    • Review liability accounts for accuracy
      • Loans (proper posting of payments)
      • Loan balances
    • Review automatic calculation and posting of Retained Earnings, which sums the prior year’s (or years’) income.
    • If you want to post prior year’s income to a different equity account, you can use a journal entry to shift posting from Retained Earnings to other chart of accounts.

    Trial Balance Report

    • Review 
    General Ledger Report
    • Review a detailed General Ledger (GL) for the tax year (the GL contains all COA accounts)
    Payee/Payor Ledger Report
    • Review Payee/Payor Ledger for each bank account 
      • Check payee files to ensure you have a Tax ID.
      • Consult with your accountant to determine to whom you must issue a 1099.
  1. Have your accountant log into your CosmoLex account.  This access will allow them to make journal entries and handle other activities in real time.  You can provide your accountant access at no charge to you if they participate in our CosmoLex Accounting Partner (CAP) program
Updated on December 22, 2020

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