Tax season is upon us again…have you prepared your business accounts?
If you answered “no,” don’t worry, you’re not the only one. Tax season sneaks up quickly every year, and if you run a business, you probably already know how much time it takes.
Use this year-end tax prep checklist to make sure that you have all of your bases covered.
Close and reconcile all accounts
At the close of the tax year, close your books and create backup copies or print-outs of all relevant reports.
As you go through all your information, review every aspect of your business in preparation and planning for next year’s budget. This includes:
- Bank accounts
- Balance sheets
- Profit & loss statements
- Cash flow reports
Saving these reports is important in case any changes occur that could alter your year end balance.
And don’t forget to lock up the end of year in your accounting software. This helps the system notify you with transactions that may be edited and that could alter balances from prior years.
Get clear on deadlines
Most employment-related tax forms are due annually on January 31. If you’re too late this year, get assistance now to push things through asap.
- W-2 forms and 1099 forms are due to employees and the IRS on January 31.
- Business taxes are due three months after you close your tax year, on the 15th day of that month. So if you close your tax year on December 31, they are due on March 15th.
- Sole proprietorships and LLCs that only have one person are due along with personal tax returns, on April 15th.
Take care of all employee-related information and tax forms
You’ll want to go through your payroll and ensure that old employees are no longer in the system and that everyone’s current information (address, name, and phone) is updated and correct.
Here are a few other year-end tax prep tips:
- Create a file / location for returned tax forms
- Make sure everyone is paid out and understands their tax withholding and bonuses
- Review and confirm that wages are recorded for current employees
- Fill out 1099s for non-incorporated service contractors who earned more than $600, and W-2 forms for all regular employees
- File W-2 and 1099 forms with the state as well as with the Social Security Administration
You can register and file online here.
File your personal income tax
You may have all of your business bases covered, but what about your personal income tax? You’ll need to file by April 15th.
Connect with your bookkeeper or CPA
To save time and stress on business and personal taxes, contact a bookkeeper or CPA. They can help you file properly should you miss deadlines, prepare for the upcoming year, and make sure that you don’t make errors that could put your business on the line.
Don’t hesitate to contact us.