3 Must Do Tax and Business Items for The New Year
Photo by Jill Wellington
Happy new year everybody! With the start of the new year, there’s new tax matters to do for your local business. We talk a lot about the importance of planning and getting ahead with regular meetings with your bookkeeper. January has a few must-do’s that you should make sure you get done. Let’s take a look at them.
Must Do Tax Items in January for Small and Local Businesses
1. Final Quarterly Items
Hopefully, you’ve been following our advice and prepping your taxes on a quarterly basis. Whether or not you have, now is a good time to get things going. You don’t want to have to rush at the last second to get everything done.
With the year over, it’s time to compile the final list of tax relevant items together. These will be needed to file your taxes and the sooner you get them done, the sooner you get it out of your hair. Putting these items together is also important for getting the next must-do item ready.
2. Prepare Yearly Profits-Losses Statement
Your Profits-Losses Statement (PLS) summarizes all of your expenses and income for a given period of time It helps you determine how much profit you made, giving you a clear idea of how financially healthy your business is. You can compile a PLS for any period of time, but you should definitely put together one for the whole fiscal year. With monthly or quarterly reports, you get to see an in-the-moment look that helps you make in-the-moment decisions. An annual report gives you a bigger-picture look at things, giving you an idea of how well you’re doing overall. Despite its importance, you’d be surprised how many small businesses forget to do them.
3. Send Out W2s and 1099s
3. Send Out W2s and 1099sYour employees will be needing these files for their own tax work – W2s for regular employees and 1099s for freelancers or independent contractors. It’s very important that you get these done right away. The law requires these to be sent to employees by January 31. The penalties for being late can add up to a lot. It also upsets your employees when they don’t get theirs on time, so don’t miss the deadline.
Get It Done Early
We can’t stress enough how important it is to get your tax work done early. It may not be strictly necessary, but it’s still the best practice. The more you put it off, the more work you have to do later. Put it off too long and you’ll find yourself rushing to get it done at the last minute. Under that kind of pressure, you’re more likely to make mistakes, and that can cost you big in IRS fines. Get it done early and you avoid that mess entirely.
Need Help?
Why not give us a call? Dragon Financial is here to help you with all your bookkeeping needs. We’ll help you get your New Year paperwork sorted out so you don’t have to worry so much yourself. Just get in touch with us and see what we can do for you!