I can hear you all groan. “We just got done with Halloween and she is already talking about the end of the year!” Never fear, we are not talking about holidays with a “jolly old elf” around here yet. That is banned in my house until after Thanksgiving! But, I AM thinking about what needs to be done for my clients for the end of the year. Below are some things to be thinking about, this list is not comprehensive but is a great place to start.
End of the year – Tax planning
If you have been keeping up with your bookkeeping throughout the year (or you have an awesome bookkeeper who does it for you) now is the time to schedule a meeting with your CPA. Why now? First and foremost, your CPA is much less likely to be busy right now. Which means they have time to do a thorough review. Which means they can give you some valuable advice on how to mitigate your tax liability for next year (if you want to save money on your taxes, talk to your CPA BEFORE April)
If you send your CPA a copy of your books (or reports from your accounting system) they can give you some guidance between now and the end of the year. This may include: issuing a bonus, suggesting contributions to a 401(k) plan or Health Savings Account & paying vendors if you are a cash basis taxpayer. Plus, if you give your CPA access to your books now, they can review for accuracy. This gives you time and space to do research as needed instead of scrambling to get information at the last minute.
You are going to have to prepare and file 1099-MISC and 1096 forms with the IRS. In the past, this meant going to the office supply store and buying paper forms and envelopes. Once home you had to get them lined up properly in your printer, stuff envelopes, and mail them to vendors. Today, there are a number of online sites that allow you to enter information and then send forms electronically. The one I use for my clients is : Tax1099 . The cost is minimal (a couple dollars for each form) and you don’t have to worry about papercuts or extra forms lying around.
I am getting ahead of myself, though. Before you file the forms, you need to make sure you have all of the information you need in advance. Now is the best time to contact vendors and independent contractors to make sure you have the current information on file. Send a form W-9 to each of your vendors and ask them to fill it out for you. The W-9 will give you all of the information you need to file your 1099-MISC forms at the end of the year. In 2017 you must issue a 1099-MISC to anyone that is not your employee that you paid more than $600. 1099-MISC forms are only issued to individuals, not corporations or LLC’s. The W-9 form that your vendors fill out will tell you all of that information so you won’t have to ask multiple questions.
Your payroll company will also be sending you notices at this time of the year. If you need to make any adjustments to your payroll for the previous year, now is the time to do it. Don’t wait until the last week of the year. Payroll companies are just as busy as you are trying to get everything done before the close of business December 31st. Depending on how many employees you have, you may want to verify their information before the end of the year too. If you are going to pay bonuses you will want to set up a special payroll.
If you don’t have a payroll company, I highly recommend you find one. Square who you may know as the credit card processor also processes payroll for a reasonable fee. Their payroll fees start around $30/month and currently is available in 12 states and counting. Filing payroll tax forms and making sure payroll tax payments are made on time should not be left to chance. Let a professional take care of those details for you.
Reports, Taxes & Filings
Now is the time to make sure that all of your reporting, taxes, and other filings are ready to go. Do you need to file quarterly sales and use tax? Is there an end of the year summary report that needs to be filed? Do you need to file Statement of Information with the Secretary of State? Now is a great time to brainstorm and create a checklist for the end of NEXT year. Review the procedures from the previous year and modify them if there is anything to add or delete. If there are no procedures from prior years, now is the time to create them.
Create a checklist of the end of the year items to review each year. By following a checklist each year will give you a guideline to ensure nothing falls through the cracks. This will allow you to approach the end of the year (and tax season next year) with ease and grace. Would you like to cruise into the holiday season relaxed this year? When you get these end of the year tasks handled early, you can relax and enjoy the holidays knowing you are ahead of the game for tax season.