As the year winds down, now is the best time to get your financials in order and prepare for filing season this spring. Here’s a few tips to ensure you are ready to file early this year:
- Reconcile your bank accounts: Whether you use QuickBooks, Xero, or another accounting information system, be sure that your bank and credit card statements have been reconciled to your financials. This will ensure the correct asset and liability ending balances on your balance sheet as well as ensure revenue or expenses are not overstated. Contact our office if you need assistance with this process.
- Review your profit & loss: Check your expense categories and ensure that you’ve properly categorized your expenses as best as possible. Any expenses you are unsure about, you can leave in a separate account, such as the “Ask my accountant” account, with a detailed description for us to review.
- Verify your vendor files: Since 1099-MISC and 1099-NEC’s may be required for certain vendors or contractors, it’s important that all this information as well as total payments to these vendors and contractors is correct. As a reminder, most 1099-MISC and 1099-NEC returns are due Jan 31, after the close of the year.
- Spot check your W-2: If you are an S-Corporation for tax purposes and are paying yourself as a greater than 2% shareholder employee, you need to ensure we are in compliance with the 2% shareholder rules. Contact our office if you have questions about these rules.
- Count Inventory: If you are an inventory business, be sure to take a count of your inventory at Dec 31 to ensure we properly calculate cost of goods sold.
If you have any questions about any of the tips above, feel free to reach out so we can make this filing season a breeze!