ABITS & Associates, Inc.

Automated Bookkeeping & Income Tax Service

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Rules, Regulations, and Requirements
Preparation Checklist


Rules, Regulations, and Requirements

Dear Client:

Due to the new tax law, the new Rules & Regulations and the new Bookkeeping requirements, we are advising you to pay all business expenses by checks, (except the petty cash items).All expenses must be clearly written in the check stubs with a brief explanation of the type of expenses, (for example: food, supplies, repair, rent, etc.).

If you pay any amount for outside labor, then the name, SS# and address of the independent contractor must be provided (there is a penalty of $50.00 for each case).As far as the small expenses are concerned, you can use the petty cash method: Replenish the fund by writing a check with the total of small expense items. All deposits must be identified on the check stubs.

Effective next month, you will be mailing the check stubs along with the daily sales for the month instead of mailing the invoices and receipts, by using our self-addressed envelopes. Upon receiving the check stubs, daily sales, payroll records and any other documentation you want to mail to us, we will be recording all checks in our computer, check by check in numerical order and with description.

The process by check will create more work for us but it will control your business and substantiate the income and expenses. Also, it will help you in the future in case of any audit from: IRS, Franchise Tax Board, State Board of Equalization and other entities.

I am very sure that the new procedure will increase the accuracy and make your life much easier. Your cooperation is appreciated, and if you have any questions, please feel free to call me. Thank you.


Dr. Ahmed Abdelnaby, EA., MS., JD.
Doctor of Jurisprudence
Certified Tax Professional


Your Income Tax return can be prepared faster and you can assist me in helping you by looking over this checklist and by bringing with you the following:

1. A copy of last year's return (if you are a new client).
2. All W-2's received from all employers and 1099 Forms, if any.
3. Any amounts received from rent, royalties, alimony, prizes, tips, etc.
4. Amount of interest earned on savings accounts and U.S. saving bond, and other investments.
5. Dividends received.
6. The cost and selling price of stock sold during the year (bring brokers statement).
7. Total amounts received and expended in business.
8. Medical expenses - Hospitalization premiums, Doctor's & Dentist's name and amount paid and cost of medical insurance.
9. Tax receipts paid for your home, Mobile Home and other property.
10. If you bought a new automobile, bring the contract.
11. Installment contracts for interest paid.
12. Interest paid on your Home Mortgage (First and Second Trust Deed notes).
13. If you bought or sold property, bring Escrow statement (purchase and sale) and list of improvement costs.
14. Landlord's name, address and Telephone number.
15. Contribution amounts to churches and charities, furniture and clothing (list names and amounts).
16. Political contribution amounts, bring receipt(s).
17. Record of casualty of theft loss(es), accidents, Fires… etc.).
18. Amount paid for child care (baby-sitting, nursery school, …etc.).
19. Miles driven for business & personal use and total gas, repairs and insurance cost.
20. Amount paid for car license (Registration Fee).
21. The cost of union or professional dues.
22. Safety shoes and equipment purchased.
23. Safety deposit box fees.
24. Record of any other miscellaneous expenses, (tools, uniform, cleaning, legal expenses, employment agency fees …etc.).
25. Record of all education expenses incurred to improve your job skills and school's name, address and the subjects undertaken.
26. The address label that comes on your tax booklet helps the IRS process your return and speeds up any refund. Please bring the booklet with you. Also bring along your State income tax booklet if you receive one.
27. If you have any questions about your income taxes, prepare a list of these questions and bring it with you.


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