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This article provides key instructions and important information to help you prepare accurate 2024 tax returns based on financials prepared by Finaloop.

Please review the following instructions prior to preparing the 2024 tax return and let us know if you have any questions!

Opening balances for 2024

For customers who joined Finaloop in 2024:

Here is some important information about how Finaloop built the opening balances for 2024 and what to do if there are variances between Finaloop and the tax return balance:

Source of opening balances

Finaloop determined 2024 opening balances (closing balances as of December 31, 2023) using verified data from independent sources of truth, including:

Banks
Credit cards
Online stores
Payment gateways
Customer-provided information (if independent data isn't applicable).

Undeposited Funds (UDF) balances were created/updated for each integrated, applicable store and payment gateway that holds available cash. This is based on information received directly from each store and payment gateway. Where applicable, this is reflected in the 2024 opening balances adjusted for UTC time zone (Universal Time Coordinated).

Action required for variances

If there are any variances between the opening balances in Finaloop’s books and the 2023 closing balances used in the 2023 tax return, these variances should be reconciled, and reflected by the tax preparer in the 2024 tax return as part of the tax filing process or reflected in an amended 2023 tax return.

Example of variance reconciliation:

Scenario:

Asset 1 in the customer's balance sheet in Finaloop on December 31, 2023 as retrieved from an independent source of truth or as provided by the customer (reflecting the “true” balance): $12,000
Asset 1 balance as reported in the 2023 tax return: $8,000

Action:

The tax preparer should consider including the $4,000 variance ($12,000-$8,000) as additional income in 2024 or amending the 2023 tax return to reflect the accurate balance.
Journal entry by Finaloop on December 31, 2023 :
- D’ Asset 1: $12,000
- C’ Retained Earnings: $12,000
Journal entry pick up as an additional income in 2024:
- D’ Retained Earnings: $4,000
- C’ Income: $4,000

For customers who joined Finaloop before 2024:

Any book-tax adjustments that were made as part of the 2023 tax filing process and were not reported to Finaloop are not reflected in the books.

If tax positions taken during 2024 (e.g., accelerated depreciation, liability recognition, equity changes) impact the Balance Sheet ending balance as of December 31, 2024, please report them to Finaloop via email ([email protected]). These adjustments will not be reflected in the books unless reported directly by you or your tax preparer.