Every year as Thanksgiving approaches, we turn our thoughts to . . . income taxes.
We get it. Your business is too busy day-to-day for you to worry about the end of your fiscal year . . . until we get to the end of your fiscal year. And since most of our clients are small businesses, their fiscal year usually coincides with the calendar year.
That means you’re simultaneously faced with running your business, dealing with holiday hassles, and getting your paperwork in order so your accountant can prepare your tax returns (personal and business).
Here are a few year-end tax prep tasks every client can do right now to help assure a trouble-free tax preparation and filing experience for 2018.
CPAs generally charge by the hour. That means, if you bring us all your receipts in a shoe box, for example, your tax return will be done, but it will take us longer to sort through everything that’s in the shoe box. Just as in your business, time is money.
It’s best if all your invoices and receipts are recorded in the same format in the same software program or spreadsheet.
Bank reconciliation should be ongoing on a weekly basis throughout the year, but we realize it’s one of those things that gets back-burnered in the pressure and fast-pace of running a business.
What we’re looking for is documentation of a bank transaction that corresponds with each entry in your accounting system.
Evaluate quarterly payments
If you make estimated tax payments quarterly, check to see how they correspond to the actual end-of-year numbers you achieved. The process will give you a good idea of the amount you’ll get back or how much you’ll owe this year.
And it will give your accountant benchmarks that will come in handy while preparing your tax return.
Review your W-9s
You must issue 1099 forms to every person you paid at least $600 to for contract labor. If you didn’t anticipate paying him or her that threshold amount, you may have overlooked having them complete a W-9 form at the time. You can still have any missing W-9s completed before the end of the calendar year.
Call your CPA today
For a successful CPA practice, every day during tax season is like Black Friday to retailers. We’re deadline driven to get every tax return prepared as accurately and efficiently as possible.
The sooner we can sit down with our clients to review appropriate records and start preparing the return, the more likely this year’s tax filing project will be smooth and stress free.