Year-end Business Checklist: 7 Things to Include

Time seems to go so fast – Fall is here, Halloween is right around the corner, then Thanksgiving, Christmas and …… Tax Season!!!  Below are some steps that should be in your year-end business checklist that you can take right now to make the upcoming tax season less stressful – they will help you to get things organized now so you are ready to take your documents to your accountant in January and easily beat all the deadlines.

  1. Start thinking about if you have paid any contractors for services during the year that requires you to send a Form 1099. The deadline to send out 1099’s is January 31, 2018; and the basic requirements are that any individual or sole proprietorship you paid more than $600 to throughout the year must be given a Form 1099. You will need the Tax ID number (social security number for individuals or EIN for small businesses) and a current address to process and send the 1099’s.  If you are having your accountant send these forms out, it is important to get the data to them in early January.  A word of advice, throughout the year, the time to have your contractor complete the W-9 (which provides the information you will need for a Form 1099) BEFORE you have paid someone for their work.  It is much easier to get someone to complete the document in anticipation of getting paid than after the fact.
  2. Reconcile all bank accounts and credit card accounts through December 31st and provide a copy of the final monthly statement for your accountant. It is much easier and more accurate to keep up with this task monthly than to try to do all twelve months in January after the year has ended. Reconciliations are easiest if you are using an accounting package such as QuickBooks
  3. Keep a detailed listing of any large assets or equipment that you purchase during the year – provide your accountant with a description of each asset, the purchase date, and purchase cost. If you are using accounting software, this detail can be found in your accounting records. However, you should keep a copy of the receipt and proof of payment in a “permanent file” that is kept until you sell that asset. When the asset is sold, you can move it to that year’s tax return file.
  4. Be prepared to provide your accountant with a listing of all income and expenses – if you use QuickBooks or another accounting program, this can easily be done with an income statement and balance sheet. However, if you maintain your books by hand or in Excel, etc., you should provide some type of summarized listing of Income and Expenses.
  5. Verify that your payroll records are accurate and be prepared to provide final payroll information, copies of W2’s, the W3 statement and Quarterly Payroll reports to your accountant.
  6. There are a couple of other specific items, that your accountant will need details on – not all businesses have these items but a few examples are accounts receivable, accounts payable and inventory. If inventory is maintained, it is a good idea to do a manual inventory count at the end of the year.
  7. If you consistently find yourself scrambling at year-end to get your business bookkeeping in order, it might be a good idea to have an accounting firm review your books and prepare financial statements for you monthly or quarterly throughout the year. This will ensure that your books are accurate and your tax return timely filed.

The tax laws are constantly changing and can be very confusing and overwhelming; however, following these steps throughout the year can really help to minimize any stress during tax season for you and help your accountant to be able to easily and efficiently prepare your tax return.