By Elizabeth M. Miller bio
The holidays are over and it’s time to get back to work—and reality. And the reality is that tax season is just around the corner. Ideally, you were attentive to your accounting and recordkeeping last year so you’re ready to just hand over your records and reports to the accountant and—voila—your tax return is ready.
But the reality is that isn’t likely to happen. Everyone gets busy and it’s more likely that you didn’t get around to fixing that journal entry or tracking down that W-9 or doing whatever little task that would have taken just five seconds right then and there, and now your accountant is tap-dancing on your forehead because your returns have to be prepared. You, of course, are not their only client. Sound familiar?
Even if you took some short cuts during the year and didn’t quite keep your records and documents the way you should have, it’s not too late. You can still get organized and have your taxes prepared quickly and without having to pay an accountant a lot more money to “fix” things.
Here’s what you need to do:
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Get your W-9s. Do you have W-9 forms from all vendors that you paid money to throughout the year? If not, download the W-9 form from irs. gov and send a quick email to all your vendors attaching the form and asking them to complete and return it to you asap. Just do one email. Address it to yourself and blind copy all the vendors that you do business with. The email can be short and sweet: “Attached is W-9 form. Please complete and return.” That way you do not have to address separate emails, but you won’t be divulging competing vendor information.
Tip: You can avoid the need to do this next year if you request W-9 forms from anyone that you do business with throughout the year.
- Mind the January 31 deadline. Make sure whatever payroll company you use has prepared the W-2 forms for your employees and that they are distributed to the employees before January 31. The payroll company files the appropriate forms with the IRS so that is not something you should have to worry about. If you have any contract employees that you pay through your payroll company, make sure to ask for those as well and make sure they are distributed before the deadline.
- Check your entries. Go through your check journal (on the computer right?) and make sure that checks were appropriately charged to the correct account when payments were made and that the accounts are consistent. Don’t call an expense “office supplies” on some entries and “business expense” on other entries if they are the same expense. This will make things confusing when you run the expense reports for different categories and will create unnecessary work. When generating records like this, consistency is so important.
- Run reports. Run the expense reports from your accounting program. This should provide you with exactly what you paid for the cost of your overhead throughout the year. This would include categories such as rent, utilities, telephone, meals, automobile, professional fees, etc.
- Do your own 1099 forms or make it easier for your accountant to do them. You can either prepare your 1099 forms for vendors yourself or provide the W-9 forms and the information from your expense report to your accountant. If the company’s name on the W-9 doesn’t clearly identify what they do for your firm, make a note such as “cleaning company” or “process server.”
Conclusion
Organization is always the key to efficiency. When it comes to taxes, you want to make sure that your records are impeccable so that you do not miss a deduction. The accuracy of your records can affect how much of your money you have to give to Uncle Sam this year.
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