The end of the year is fast approaching!
Here are some tips to help your year-end accounting process run smoothly. Planning ahead will ensure you have accurate and timely financial statements, facilitate tax preparation, and help you meet filing deadlines:
- W-2 and 1099 processing: Employees and certain independent consultants must receive their appropriate forms by January 31st. Start planning now by confirming that you have the necessary and accurate information. Verify your employees’ filing status and their mailing addresses. Also confirm that your contractors’ Form W-9 information (e.g., tax identification numbers) is up-to-date. To facilitate e-filings, gather email addresses for all contractors so that you can email them their 1099s.
January 31st is also the deadline for filing with the IRS your government copies of W-2 and 1099-MISC with Box 7 amounts. (1099-MISC forms without Box 7 amounts and all other 1099 types are not due to the IRS until April 1, 2019.) If you have a third party provider who files these forms on your behalf, discuss the process with them now to ensure they have the information needed to file timely.
- Affordable Care Act (ACA): New this year, ACA forms 1095-B and 1095-C are due to recipients on January 31, 2019, and to the IRS on April 1, 2019.
- Accounts Receivable and Payables: Before year-end, it’s a good practice to review these accounts for any long-outstanding items that may require potential write-offs.
- Inventory: If you have inventory, ensure any required year-end physical inventory counts are completed timely.
- Property, Plant & Equipment (Fixed Assets): Make sure you’ve accounted for any additions and deletions made during the year, as well as entries for depreciation or amortization.
- Proper Account Coding: Take care of any outstanding items, such as entries that haven’t been categorized to their appropriate accounts yet. If you aren’t sure how to account for certain activity, check in with your accountant.
- New Activity: If you anticipate any new activity occurring on or around year-end, alert your accountant so that he/she can ensure those the activity is properly recorded in the books. This includes new contracts having a financial impact, special employee bonuses, new loans or loan payoffs, etc.
- Cash Management/Year-end Expenditures: If you’re on a cash-basis for tax purposes, review your available cash on hand; it might be a good opportunity to make some purchases for inventory or property, plant & equipment before the end of the year, so you can get the tax benefit in the current year.
- Tax Planning: Consult with your tax preparer to discuss what they expect or need from you for any applicable tax filing processes. Further, they can provide consultation on whether any new laws and regulations could have an impact on how you manage your business or your tax planning.
By preparing ahead of time, you can alleviate the stress of the year-end accounting process. If you have questions and/or need more assistance, please reach out to me, I’ll be happy to talk with you. http://www.consultancellc.com
The tax planning is especially important this year. While nothing is certain, your accountant can help you hedge on what may occur with the new laws.