For small business, filing taxes can be a big undertaking. Here are tips for staying ahead of deadlines with a proactive approach.
As most of the country slogs through short days and cold snaps, it can be difficult to feel motivated enough to be proactive. And while the April 15 tax deadline still looms off in the distance, there are a few accounting and housekeeping tasks every small business and independent contractor needs to shore up this month, before it’s too late. Doing so can save hassles and potential penalties when taxes are filed.
Send out/request all W-2 and 1099 forms. Businesses legally have until January 31 to postmark employee and contractor tax forms such as W-2s and 1099s. Any contractor who you paid a total of $600 or more in the last calendar year is required to receive a 1099. Be sure all the included information (address, etc.) is correct to avoid having to issue a corrected form later. And remember, while forms can be securely digitally shared and downloaded through web programs like Quickbooks, information containing social security numbers and other sensitive information should never be emailed.
Contractors, be sure all your clients have your current address and contact information so you can receive your forms. Employees, be sure your information is current with HR/payroll (especially if you’ve moved or changed tax filing status) so the correct local and state taxes are being deducted from this point forward.
Set an appointment with a qualified CPA or tax preparation service. The recently passed Tax Cuts and Jobs Act has created a number of changes for individual filers, contractors and businesses that can affect how much each is able to deduct. Even if you traditionally use an online tax preparation software program, this year many businesses will find it well worth the investment to have a professional walk them through how the changes affect their tax burden and how to legally maximize their return. The new law will likely send many flocking to a pro, so make your appointment now before their calendars fill up.
Plan ahead for any major projects while your yearly budget is fresh. If a major project like a website refresh, new employee, work with a contractor, brand overhaul or store opening could be in your future this calendar year, set aside a budget and begin to make a timeline now, even if the project isn’t set to begin until Q4. If you wait to plan until later in the year, your budget and resources will often be eaten up by the time you get to that point in the year. So plan smart now to stay on budget and on track later.