There’s no doubt the holidays are the most wonderful time of the year, but once the celebrations are over, that tune quickly changes. January can be the busiest time of the year for you and your business with all that goes along with year-end close. Use this year-end survival checklist to get a strong start on the new year.
Make your list and check it twice
Here are a few items every business should look at and/or make sure are completed before closing the year:
- Reconcile general ledger accounts to bank statements
- Complete all invoicing
- Record all your supplier bills
- Print year-end reports for historical review (i.e. accounts payable/receivable, inventory, financial, payroll, etc)
- Make adjustments to reports as needed ( i.e. write off bad debts, account for depreciation expenses, adjust entries for accruals of payroll tax liabilities or pre-paid expenses, etc)
- Print and mail 1099s (due by 1/31)
- Print and mail payroll forms if you do it yourself (W-2, W-3, 940, 941)
- Print and mail 1096 to IRS (by 2/28)
Wiz Through Year-End with Sage 50 Year-End Wizard
When you’re ready, close any other applications and start the process at the end of your business day because you’ll want to leave your computer running. Before launching the wizard, print out any items such as invoices and payroll checks as well as clear the Waiting on Bill from Vendor check box in the Purchases/Receive Inventory window for any outstanding vendor purchases.
The Year-End Wizard guides you through the process. Simply select Tasks, System, Year-end Wizard. Sage 50 requires you to make a backup so give the back up a unique name and consider putting it on removable media (CD, flash drive, external memory, etc.) for future reference.
You will also be prompted to run year-end reports, which you can do on paper, export to Excel, or to a PDF file. It’s recommend you retain a backup file of your Peachtree/Sage 50 data for seven years, plus save PDF copies of the following reports for seven years as well:
- General Ledger for the year you are closing
- Under general ledger, General Journal for the year you are closing
- Under accounts payable, Check Register for the year you are closing
- Under accounts receivable, Cash Receipts Journal for the year you are closing
- Under payroll, Payroll Journal for the year you are closing
The best advice to survive year-end? Keep your financial activities consistent and thorough each month of the year (with the help of Sage 50), so you’ll prevent year-end from becoming a major undertaking.
photo attribution: © melpomene/depositphotos
Today’s tax laws can be complex and confusing. Do you have a hard time keeping up with the constant changes and revisions? What’s even more daunting is that the simplest, most innocent mistake can result in unexpected penalties.
It’s tax time, and as your business filing deadline looms, it’s important for small business owners to stay on top of current tax changes and be aware of what to watch for in the future.
What Can You Deduct?
In preparation for filing, there’s a lot for small business owners to think about, and just as many deductions to benefit from. Just to name a few:
- Current capitalized expenses
- Auto expenses
- Business and professional fees
- Bad debt
- Insurance costs
- Home office expenses
- Retirement contributions
- Meals and entertainment expenses
- Travel expenses
The Affordable Care Act
The Affordable Care Act (ACA) added an estimated 2,400 pages to the U.S. tax code, further complicating the tax landscape for businesses of all sizes. Most familiar to business owners is the tax penalties for businesses with 100 or more employees who fail to provide health insurance to full-time equivalent employees and/or not reporting to the IRS what type and the cost of coverage provided for employees.
Beginning Jan. 1, 2016, businesses with 59 to 99 employees will also be required to offer health insurance.
Don’t Let Taxes Trip You Up
Tax law can be complicated, but they don’t have to trip you up. Consider these tips:
- Think about taxes all year long. Waiting until the last minute could make thing more complicated and limit your money-saving options.
- Bring in a professional. Hire a knowledgeable tax attorney or accountant who can tackle complex tax laws with ease and help you identify tax breaks and deductions you might otherwise miss.
- Always be aware. Even with the help of a skilled professional, it’s your job to keep up with news related to laws.
- Never assume. Even though Congress has always passed the tax-extender bill at the last minute, it’s never guaranteed. Don’t make any business decisions on the assumption that tax breaks will pass.
Sage 50 Accounting not only has its Year End Wizard to help simplify your year end processes, this business management software also helps with simplified reports for you or your accountant to help speed up your filing process.
Sage 50 with Payroll offers error-free tax filing, standardized and customized reporting features, plus support from professional payroll experts.
Calculating deductions, keeping up with changing tax laws, and easily preparing employee paychecks and reports — reducing errors and saving time with every transaction.