Tax season may not be your favorite time of year, but perhaps I can make it easier. Here are four things you can do now to smooth out the time required to pull your records together for your tax preparer.
1. Contractor Clean-up
In preparation for 1099s, take a look at your vendor list now and identify who should receive a 1099. Perform a mini-audit and ask for any W-9s that are missing so you can plug in your tax IDs without scrambling at the last minute.
2. Check or PSE?
Also in preparation for 1099s, you’ll need to break out payments made to vendors by check versus by credit card, third party or what the IRS calls PSE, payment settlement entity. You’ll only need to issue 1099s to vendors you wrote checks to.
3. Play Catch-Up
Is there anything you can calculate in advance of crunch-time? If you had loans, you can secure the appropriate loan documents and amortization schedules. If you have new equipment, some of these depreciation schedules can be prepared ahead of time. Did you sell any major assets? A summary of the transactions can be prepared and ready to go. Also, if you are behind in your bookkeeping, filing, bank reconciliations, or other accounting chores, it’s a good time to get caught up so all the routine stuff is out of the way.
4. Getting Organized
When the year ends and the tax documents start arriving, place them in a special folder or stack so that all the papers are together. Scan them in and place them in a specially labeled folder on your PC. You’ll be more organized than ever.
When all of the mundane items are completed early, it leaves time for the more important conversations, such as discussing new ideas for tax reduction, ways to operate your business more efficiently, and planning for your future.
If we can help make your tax and accounting tasks easier during any time of the year, please reach out and drop us an email.
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.