The end of the year is fast approaching and there are a few important issues that should be on your mind:
Documentation – Make sure you have copies of all your bank statements and cancelled checks. Your bank should provide copies of your cancelled checks free-of-charge, included with your monthly bank statements. You will need a year-end summary from your payroll service as well. If your business carries inventory you need to count it and value it (at cost) on December 31, or as close to that date as possible. Get statements for the year-end balances on any loan or other credit accounts you carry.
Planning/Forecasting – If you keep your own books, review your profit and loss statement for accuracy. Has your profit increased or decreased as compared to last year? Why? If profit has increased significantly are there steps you can take to reduce it? Remember, more profit means more taxes!
Reporting – You are REQUIRED to issue 1099-MISC forms reporting the amounts you paid to any business or business person in excess of $600 total during the year. W-2 employees and certain large national corporations are exempted but most of your vendor payments and all of your subcontractor payments need to be reported. Have all your vendors and subcontractors fill out W-9 forms so that you have the basic information you need and then total up the payments for each. The completed 1099-MISC forms must be provided to the vendors, and a summary with copies must be filed with the IRS, by January 31, 2020.
If you have any questions or are unsure about how to proceed, please get in touch with me.
I help clients reduce taxes, increase profitability, meet reporting requirements and save valuable time. Contact me to find out how!
Leigh J Kremer, CPA
27 Beach Road, Suite C0-5B
Monmouth Beach, NJ 07750