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Tax Season Survival Tips

Jan 26, 2018

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Tax season doesn’t have to be the most dreaded time of year for your business. Save yourself all of the money and headaches that come with confusion, deduction errors, and missed deadlines by getting organized! Wondering what the pros say? I sat down with several Wyoming accountants to find out what their tips are:

 

Keep tidy books

Make sure your books are tidy as that will save time for the CPA, which translates into saving money for you!

 

Record personal activity correctly

Remember, all personal activity should run through owner draw/shareholder distributions accounts.  You are taxed on whatever your business made for net income no matter how much you took out of the business, typically with sole proprietorships, partnerships, and S-corporations.  It’s also an opportunity to remove old outstanding items.

 

Review preliminary reports for accuracy

Print financial reports and review them for accuracy. This will allow for you to pinpoint things that need changed or errors that have been made. If you are unable to fix them, you can make note of them for your tax preparer. This will make their job easier because they will be aware of things that need looked at.

 

Back up your data

Make the proper backup copies and keep one somewhere offsite in case of a computer crash.

 

Analyze your entity type

With recent changes to tax legislation, it will be worth talking with your tax preparer about whether your current business entity type is still best for your situation.

 

Reconcile bank statements for December

Part of the accountant's process is to tie out the balance sheet for the year so they need support for the amounts such as year-end inventory, listings of any new asset purchases or disposals, list of receivables, credit card and bank statements to verify amounts are correct, and W2 and W3's to make sure payroll is correct.

 

The pros also recommended you keep some specific things in mind for 1099 and W-2 forms:

 

1099

Make sure if you paid anyone $600 or more for services during the year that you review whether or not a 1099 is required to be filed.  Penalties for this can be severe if they are missed.  We see these issued a lot for rent, advertising, contract labor, attorney fees, etc.  If you have questions you should review the rules or discuss with your tax preparer because it is an area of focus for the IRS as they are aware that some people are missing this requirement.

 

W-2

Make sure the W-2s are filled out correctly and filed on time.  There are rules with health insurance and reporting for S-corporation shareholders over 2% that you have to add the health insurance premiums into box 1 and box 14 of the W-2 but not boxes 3 or 5.  If you do not report it this way then you could miss out on the health insurance deduction or have to amend your payroll forms.  W-2s and 1099s have to be sent to the recipient and the IRS by the end of January.

 

Still suffering from tax season headaches? We can help!

  • All of our business advisors can assist with planning, budgeting and forecasting to make this year go as smoothly as possible.  Tax season does not have to be stressful. Allocating time early on to getting organized will help you better prepare for this year’s filing and allow you to focus on 2018 and the good things to come for your small business.

 

  • We have a QuickBooks pro advisor! If you need help with that program, please reach out to Rob Condie at 307-352-6894 or rcondie1@uwyo.edu.

 

  • We invite you to join our upcoming webinar, Tax Considerations for the Self-Employed, where we will cover the top five tax questions asked by entrepreneurs like you. Click here for more information.

 

 

Bruce Morse is the Northwest Regional Director for the Wyoming SBDC Network.  He has a bachelor’s degree in Business Finance with a minor in Marketing from Montana State University-Bozeman.  A former banker and Economic Development Finance Professional, Bruce specializes in assisting clients with all things numbers: loan applications, financial analysis, business planning and projections, and crowdfunding ideas. 

When he’s not in the office:

Bruce loves travel, good food, and an occasional round of golf!

 

 



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