As we are entering the new year, we are also getting closer and closer to tax season. Small business owners can make matters significantly easier on themselves by engaging in certain accounting best practices before the end of the year so they can hit the ground running come 2017. While it might seem like too much to wrap your head around during the holiday season, you will most certainly thank yourself for it later.
With this in mind, here are some year-end accounting tips from a CPA in Woodbridge, NJ:
- Get all of your documents and finances organized: Getting organized is the first step you should take to prepare for the end of the year. This means making sure you have properly (and consistently) formatted all of your invoices, putting them into the same system. Find all of your receipts and other paperwork from throughout the year, and make sure you get them organized according to date, expense and category of purchase. Check through all of your other financial documents and make sure everything appears to
be in order.
- Reconcile your accounts: As a general rule of thumb, you should be completing all of your bank reconciliation tasks on a weekly basis. However, we understand that with how busy the average small business owner is, this might seem like an unrealistic task. Regardless, now that it’s the end of the year, you need to go back and catch up on your reconciliation. This is the process of matching up your bank transactions with their entries in your business’ accounting system. Once it’s time to prepare your taxes, this process will make getting your taxes ready so much easier.
- Prepare your W-9s: If you use contracted workers for your company, everyone you have paid under contract more than $600 must complete a W-9 form. Ideally you would issue this form at the very beginning of your contracted arrangement, but you can still get it to these contractors at the end of the year. Doing this allows you to issue your contractors their 1099 forms as well, which they use to report their income to the federal government. By getting them their W-9 forms and enabling them to take care of their 1099s themselves, you give yourself one less thing to worry about.
- Look back on quarterly payments: Review all quarterly estimated tax payments you made (if you do make them) at the end of the year. This will help you determine what you might owe or what refund you might get after filing your taxes, and how you must adjust your budget for next year.
- Get started on tax prep early: Once the new year hits, your CPA will likely be slammed with people wanting their assistance on tax prep. So you can actually get started early, at least book their services before the holidays so your work will be at the front of the line.
For more information about how to get your finances in order at the end of the year, contact a trusted CPA in Woodbridge, NJ at Lata Kirpalani, CPA P.C. DBA Tax Tuesday.
Categorised in: Uncategorized
This post was written by admin