The end of the year is a busy one for business owners – holidays, travel, family time but your business really needs your attention too. You have tasks related to accounting, IT and end-of-year administrative tasks to close out the current year on a high note but it also sets you up to start off the next year on the right foot. Here are some great tips for your small business to do before the end of the year. Hope you enjoy Cathy’s Tuesday Tip! ~ Cathy
Whoa, slow down. Year-end talk already? I just am getting into the back-to-school routine. That’s what you’re probably thinking. Football season, errrr I mean, September is here and it’s a perfect time to get year-end on your mind.
You teach your kids to be organized with schoolwork, so you should practice the same techniques when it comes to year-end preparation for your small business. Trust us, you’ll thank yourself later.
Here are a few things you should do:
1. Verify employee data.
Examine all of your existing employee data. Proof your information for accuracy of details such as:
- Birth dates.
- Properly keyed Social Security numbers.
- Correct spelling of names.
- Up-to-date name changes.
- Accurate tax ID numbers for independent contractors.
- Local taxes.
This will save you from any stress when it comes to handling tax forms later on.
Don’t forget about any non-employees as well. If you use a contractor, you should verify the tax ID number from the Form W-9 for that person.
2. Year-end tax returns.
As you close out each quarter of the year, you’re responsible for filing payroll tax returns, so you should be used to this drill. But of course, there are more responsibilities with year-end returns.
To refresh, you must file IRS Form 941, Employer’s Quarterly Federal Tax Return and Form 940, Employer’s Annual Federal Unemployment Tax Return by Jan. 31 of the following year.
It’s a good idea to review your Forms 941 from the previous quarters to check that you reported and paid your withholding tax correctly. If there are any discrepancies, make the corrections for the fourth quarter Form 941.
Don’t forget to check your state’s specifications such as if it imposes a personal income tax because you’re also required to submit state payroll forms by the required deadline.
3. Third Party Sick Pay.
Make sure everything gets reported to your payroll provider (hopefully that’s us) if you’ve had any third party payouts for disability payments.
These amounts must be reported on tax returns and Forms W-2, so timeliness and accuracy are crucial.
4. Affordable Care Act.
Although much uncertainty remains with the future of the Affordable Care Act (ACA), the reality is that the tax form requirements are still in effect. So it’s best to make sure that you know what those requirements are – or if you’re even subject to comply.
The IRS has published its draft of 2017 Instructions for Forms 1094 and 1095 which will help you prepare for ACA reporting. Some key differences highlighted from the 2016 instructions are:
- Removal of section 4980H transition relief as none is available for 2017.
- Regulations relating to the requirement to solicit the TIN of each covered individual.
You can find the instructions for Forms 1094-C and 1095-C here.
You can find the instructions for Forms 1094-B and 1095-B here.
Now is a great time to clean up all your accounting-related processes so you’re in a good place when year-end rolls around.
Run reports to clean up any inconsistencies with unpaid bills or open invoices. Remove unused or closed accounts and clear up any deposited funds.
Aside from getting everything straightened out in terms of payroll and paperwork, there are some other items to consider when getting organized for year-end. Thus, the miscellaneous category.
- Business goals. As mentioned in a previous blog post, September is an excellent time to refocus your goals. What’s the point in waiting until the New Year? The same mentality should apply to your business goals. Write them down and discuss with employees.
- Passwords. Reports show that a single data hack could cost your small business anywhere from $82,200 to $256,000. If you aren’t constantly updating your passwords, you could be at risk. Take some time to go through all your saved passwords and change them up a bit. Just don’t forget to record them in a safe place.
- Employee feedback. Your employees are your greatest asset and are critical to your small business success. If you haven’t conducted regular performance reviews throughout the previous months, year-end is a great time to connect so that everyone knows where they stand and what to expect. Learn more about employee performance reviews by clicking here.
To view more of Cathy’s Tuesday Tips, visit our blog.