What to Include in Your CPA Handoff

Most agents hand their CPA one of two things: a shoebox, or a spreadsheet they built in a panic the week before the deadline. There's a better option — and it starts with knowing what your accountant actually needs.

A good handoff isn't about volume. Your CPA doesn't want every gas station receipt in chronological order; they want a clear, honest picture of your business year that they can work from without archaeology. Here's the checklist.

1. Categorized expense totals

Start with the summary: total business spending broken into sensible categories — marketing and advertising, MLS and association dues, office and supplies, professional services, insurance, education, meals, and so on. Your CPA thinks in categories because tax forms think in categories. If your records are already categorized through the year, this page writes itself. If they aren't, categorizing is the single highest-value hour you'll spend before the handoff. For the expenses agents most often miss entirely, see The Small Business Expenses Real Estate Agents Forget to Record.

2. A mileage log with a business purpose per trip

Mileage is usually an agent's largest deduction-related number and the one most often done badly. Under current IRS guidance, the log should be contemporaneous — recorded at or near the time of the drive — and each entry needs the date, the destination, the business purpose, and the miles. "Oct 14 — 123 Smith St, buyer showing, 22 miles" is a log entry. "About 8,000 miles for showings" is a guess. Hand over the log as its own document, separate from expenses, with a yearly total your CPA can use directly. Confirm the exact requirements with your CPA.

3. Receipt images attached to their expenses

Your CPA works from totals, but the receipts are the proof behind them. The most useful format is boring: each receipt image attached to the expense record it documents, so nothing has to be matched by hand. A folder of 400 unsorted photos is barely better than the shoebox. This is also where a year-round habit pays off — A Simple Receipt Routine for Busy Showing Days covers the thirty-second version.

4. Business-use percentages on mixed expenses

Phone bills, home internet, a vehicle used for both business and personal driving — mixed expenses need a stated business-use percentage before your CPA can use them. Don't make your accountant guess: mark each mixed expense with the percentage you used and a one-line note on how you estimated it. Consistency matters more than precision; "80% business use, estimated from call and data logs, applied all year" is something a CPA can work with.

5. Property and deal context

Agents are unusual among small businesses: much of their spending attaches to specific properties. Staging, photography, signage, and lockbox fees for 123 Smith Street belong with 123 Smith Street. When your records carry that context, your CPA can see which costs belong to which transaction — and you can see what each listing actually cost you. If your tracking doesn't connect expenses to properties, add a simple property column before the handoff.

6. A short note on what you left out — and why

This is the item nobody includes, and accountants love it. A brief list of judgment calls you made: expenses you weren't sure about, drives you didn't log because the log started mid-year, personal/business splits you estimated. Flagging uncertainty is not weakness; it's the difference between your CPA reviewing your decisions and discovering them. When in doubt, include the item and flag it rather than silently dropping it.

7. Prior-year comparison, if you have it

If you handed over records last year too, a one-page comparison — this year vs. last, by category — helps your CPA spot anomalies fast. A category that tripled or vanished is either a story or a mistake, and either way your CPA wants to know before the return is filed. Even a rough comparison is useful.

Don't wait until April to start

The handoff goes smoothly when it isn't the first time your CPA sees your numbers all year. A brief mid-year check-in — even a fifteen-minute call in summer — lets your accountant flag missing categories, estimate payments you should be making, and tell you what to capture more carefully in the second half. Quarterly estimated taxes are a fact of life for most agents; each estimated payment is a natural moment to glance at your records and ask whether they're complete. By the time the real handoff arrives, there should be no surprises for either of you — just assembly.

What a good handoff feels like

Done right, the handoff is a short meeting, not an excavation. Your CPA opens categorized totals, spot-checks the mileage log, glances at flagged items, and asks you three smart questions instead of thirty basic ones. You look like the organized professional you are. And next year, because the system is already running, it takes a tenth of the effort.

Real agent questions

What format should I give my CPA?

Ask your CPA — many accept a simple spreadsheet of categorized totals plus a folder of receipt images. What matters most is that the numbers are organized by category, the receipts are attached to the expenses they prove, and the mileage log is separate and complete. A clean spreadsheet beats a shoebox every time.

Does my CPA need every receipt or just totals?

Give them both: categorized totals for the return itself, and the receipts behind them as backup. Your CPA works from the totals, but if anything is ever questioned, the receipt is the proof. Attach each receipt image to its expense record so nothing has to be matched up by hand.

How detailed must a mileage log be?

Under current IRS guidance, a mileage log should be contemporaneous — recorded near the time of the trip — and show the date, destination, business purpose, and miles for each business drive. "Drove around for showings" isn't enough; "Oct 14 — 123 Smith St showing with buyers, 22 mi" is. Confirm the exact requirements with your CPA.

What if I missed logging some drives?

Don't invent a log after the fact — reconstructed mileage presented as contemporaneous can cause more trouble than it's worth. Rebuild what you honestly can from calendars, texts, and appointment records, label it clearly as reconstructed, and let your CPA decide what to do with it. Then start a real log going forward.

Should I separate personal and business before the handoff?

Yes — that's one of the most valuable things you can do. Handing your CPA a clean business-only set of records, with business-use percentages already marked on mixed expenses, saves them hours and saves you from paying for that sorting. If you're unsure about an item, flag it rather than guessing.

This article is educational and does not constitute tax advice. For questions about your specific situation, check current IRS guidance or ask your CPA.

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