It’s that time of year again. It’s January and for us business owners, that signals the time to close out 2010. What that translates to is simple to say, but a pain to complete. If you have not already done so, get ready to complete the following:
Issue 2010 W-2’s
If you have employees, you have to run reports from your accounting software and print your W-2’s. Many companies buy the package from a local office supply, but did you know you can order the forms from the IRS for free? You just have to do this in advance to allow for shipping to your location. While the W-3 does not need to be sent to the Social Security Administration until March, you do have to give the employee their copies by January 31.
If you use contractors in your business, and paid them over $600 over the course of the year, you need to issue them a 1099. Most businesses use the MISC form, but the type of industry, services offered or the vendor may dictate otherwise. Check with you local CPA to get good advice. Again, the forms need to be sent to the government within the next few weeks, but the contractor copies should be mailed by January 31 as well.
Run Year End Reports
I recommend my clients run the Balance Sheet by quarter and the Income Statement by month, to provide to the accountant. You may also want to run a receivables report, cash flow and the vendor reports (which you will need to use for your 1099’s). One other report that comes in handy is the Sales Tax detail and summary reports, which may be required for quarterly and annual filings. If you run a trial balance, you may discover some discrepancies at the surface level. If you do, you will need to make correcting journal entries to properly reflect the accurate financial status of your company.
If you expect a tax refund this year, you may want to get all your documents, receipts and other details together and head to your tax preparer as early in the season as possible. Others who may be applying for college assistance will also need to have these documents ready, as many of the required form submissions will need to have these attached, or at a minimum, the numbers from the tax forms included.
In any case, the early bird stands to benefit here, so do not procrastinate or delay this year. The sooner this is behind you, the better.