It's January which means tax time will quickly be upon us. A lot of business owners don't start thinking about filing actual income tax returns until March or April. However, as a CPA firm we recommend that you take action now for items that are due by January 31st. They may not all apply to your situation, but you need to be preparing to address the ones that do apply. They are as follows:
- Make sure that you have everything you need to generate W2s and other annual payroll tax filings. If you use a payroll service provider they should take care of these filings for you. If you do payroll yourself this could include verifying that data in your payroll records are correct and that you have a plan on how to generate and report (electronic or paper) the W2s to both the IRS, state, and employee.
- Make sure that you have everything necessary to issue your 1099-MISC forms. This would include the amounts paid to each unincorporated subcontractor during the year that provides services. You'll want to have an IRS W-9 form on hand so that you have the name, tax id, and address of the vendor.
- Make sure that you have a list of all your assets and supplies that need to be reported on your county business property tax listing. This is the most frequently missed item by new business owners as many are not even aware that it exists.
- Make sure that all your accounting records and bank reconciliations are in order for the year so that when you begin your tax preparation process it will go smoothly.