The end of the year is here and business owners have a short period of time to put a nice ribbon on 2019. There are some things from a tax liability and compliance standpoint that must be kept in mind to have a smooth tax season and start off the new year right.

 

First and foremost, are the books of the business up-to-date and in good order? If they are, you and your tax advisor can estimate December’s sales and expenses and determine an approximate tax liability for 2019. If there are any equipment purchases on the horizon, and you have the cash or financing available, you might consider buying the equipment by December 31. Other tax strategies can be discussed at this time instead of in the heat of tax season. The fourth quarter estimated income tax payment, due January 15, can also be adjusted, if necessary.

 

On the other hand, if your business’s books are not current and properly organized, then be proactive and get professional help now from your accounting firm. Tax professionals have limited time to help you with the books when tax deadlines loom from January to April, and tax planning opportunities may be missed.

 

Form 1099-MISC information reporting must be completed for all non-employee compensation by January 31, including e-filing with the IRS. It is best to find all non-corporate vendors right now that will pay $600 or more for business services by December 31. Once you have your list, give or send to these vendors a Form W-9 to request proper name, address, tax ID number and business organization as soon as possible or better yet, before you pay them. Keep this in mind throughout 2020. These vendors are required to fill out and sign this form and get it back to you, but sometimes they do not. Without a properly filled out 1099-MISC, you are not in compliance with the IRS information reporting rules and penalties could result. Your accounting firm can prepare, mail and e-file all required 1099 forms for you.

 

Your payroll service will produce W-2s by end of January and file quarterly and annual wage reporting and payroll tax forms. New York State Sales Tax for annual filers is due March 20 for the 12-month period ending February 29, 2020.

 

Certainly, having a good accounting system is key to staying on top of your business operations and finances, and makes government compliance reporting much easier and efficient. Today’s technological advances provides an opportunity to outsource this part of your back office operations. If you do not use an accounting firm that provides this service, consider Equus Advisors. We work in a virtual collaborative enviroment with your business using our BOSS service (Back Office Support System). Our accounting, payroll and tax experts handle these back office tasks so you can focus on what you do best…running your business!

 

Enjoy this season of thankfulness and giving!