Kane Accounting


Accounting Basics

What items should be on your business year-end list?

If your family is anything like mine, you already have your house decked out for the holidays and the Christmas season is in full swing. While each family member is likely making out their wish list for Christmas, your business needs a different kind of list for this time of year.

Small business owners need to keep in mind a short list of “to-do” items as they prepare for the year’s end. Making sure you have each of these items managed is important to end your year with your business in order and ready for the new year.

You might be asking yourself, can’t some of these tasks wait until I actually need the information in the spring? Not really. Sure, you can wait that long on a couple of these, but it’s best to tackle them all now so you can ensure that the information is correct as you start the new year.

Here’s the top four items I encourage clients to remember as they close out their finances for the year:

Will you have to file any 1099-MISC forms?

Did you pay any non-employees $600 or more? Then, by law, you must provide them with a 1099-MISC form. Keep in mind that it’s best to have a new W-9 each year, even if the person’s information hasn’t changed from the previous year. You need to make sure you have their legal name (how they file for taxes), their tax ID number, and address. Don’t have the appropriate W-9 forms for some of your people? You can fill it out and print it directly from the IRS website. Note: it does need to be signed to be valid! You will face penalties if you fail to provide your 1099s by January 31 or if you file without the proper information included.

Is your bookkeeping up-to-date?

If you’re an S-Corp, Partnership, or an LLC, your annual tax return is due March 15. You need to have your bookkeeping up to date for the end of the year so that there are no surprises at tax time. It’s also important to always have updated balance sheets and income statements in case investors, bankers, or other stakeholders want to see your year-end financials.

Have you scheduled a meeting with your tax preparer?

You might think that you only need to meet with your tax preparer at tax time, but that’s not the case. Schedule an appointment with that person before the end of the year so you can look at your profit & loss statement, find out your estimated tax liabilities, and decide if you should make any last-minute business purchases to not only prepare for the new year, but to reduce your tax liability. While you’re there, go ahead and schedule your tax preparation appointment. As corporate and personal income tax deadlines come quicker than you might think in the spring, it’s wise to schedule a time with your tax preparer sooner rather than later to get your taxes done.

Are there any charitable donations to make?

Did you know that all business types can take a tax deduction if they donate to a charity with the approved tax status (usually 501c3)? This is the time of year to decide if you want to do any last-minute sponsorships of your favorite organization through your company.

Need help?

I love helping small businesses succeed by doing what I do best, so they have time to do what they do best. Have questions about getting any of this information together? Let me help! Contact me today to schedule a free consultation.

Jamie Smith