Questions about unusual accounts
Expect questions about any account with a vague name: Miscellaneous, Ask My Accountant, Other Expense or Owner Contributions. A large balance in one of these looks like a place where something got parked. For each one, write a sentence explaining what it holds and why.
Preparers also look at the equity section. They want to know whether money moved between you and the business, and in which direction. An owner draw, a capital contribution and a loan from the owner are three different things, and the return treats them differently.
Questions about large or round payments
Big checks and round-number transfers draw attention because they are often not ordinary expenses. A payment of exactly five thousand to a family member might be wages, a loan repayment or a gift. A preparer will ask which.
Keep the paperwork that explains such payments: an invoice, a signed agreement, a loan note, or an email trail. If it was a repayment of money you lent the business, the note and the original deposit help prove it.
Questions about who got paid
A preparer will compare your payments to individuals against your Form 1099 filings. If you paid a freelancer well beyond a few hundred dollars and did not issue a form, expect a question. They will also ask whether any of those people worked like employees.
Have your vendor list, with any W-9 forms on file, ready. If you paid people through payment apps or credit cards, mention it, because the reporting responsibility can differ in that case.
Questions about assets and loans
Any purchase of equipment, a vehicle or furniture raises the question of whether to deduct it at once or spread it out. Bring the invoice and the date the item was first used for business. Do not decide the treatment yourself in the books and assume it is final.
For loans, the preparer needs the lender statement showing interest and the ending balance. If the books show the full monthly payment as an expense, say so, because the principal part of that payment is not an expense.
Questions about mixed personal use
Cell phones, vehicles, home offices, meals and travel are the usual mixed-use areas. Preparers ask how you decided the business share and whether you have records. A rough guess recorded nowhere is weaker than a simple log kept as you go.
If you know some personal items slipped into the business accounts, say so up front and show the correction. Honest disclosure makes the conversation easier and usually avoids a bigger cleanup later.
Make a one-page answer sheet
Before your appointment, write a one-page sheet listing each odd account, each large payment, and each mixed-use area with a one-line explanation. Attach it to your reports. You are not expected to know the tax rule. You are expected to know what happened and to show the documents.
Common questions
Is a bookkeeper the right person to answer these questions?
A bookkeeper can explain how transactions were recorded and supply documents. Questions about how an item is treated on the return belong to the tax preparer, CPA or enrolled agent.
Do preparers look at every transaction?
Not usually. They scan the reports for items that look unusual or large and then sample the detail, so clean, labeled books reduce questions.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.