Spring is upon us and for most taxpayers 2018 reporting is almost behind them. Form 1099s have been filed, the pass-through business return filing date has just passed, and we are quickly approaching the 4/15 deadline for individual and corporation tax return filing. This means that taxpayers do not need to worry about accounting and taxes again until December, right? Wrong. Now that 2018 reporting is wrapping up, it is the perfect time to reevaluate how the prior year went in terms of reporting and also what can you be doing as you look forward to the rest of 2019.
I am sure many business owners were requesting Form W-9s at the last minute in order to make sure all the proper 1099s were issued. To avoid this in the future, there are a few procedures that can be implemented. One way is to get into the habit of requesting a Form W-9 whenever you start working with a new vendor and to reevaluate quarterly if you are missing any Form W-9s. Accounting software, such as QuickBooks, provide useful reports to list out who your 1099 vendors are and how much has been paid year to date. Although the above step seems basic, it can help eliminate last minute scrambling to request forms and gives you peace of mind knowing that all 1099s have been properly issued.
Did your 2018 income end up being higher than expected resulting in a higher tax bill that you were not ready to handle? What led to this situation? Was accounting consistently handled throughout the year or was it put to the side until December or January? Was communication between you and your accountant consistent on a weekly or monthly basis? Regular communication with your accountant and keeping up-to-date records are critical to keeping your business moving in the right direction and keeping you informed on what tax liability is coming down the road.
As part of your spring cleaning, not only should you evaluate how you maintain your records and handle your accounting, but you should also consider how to use your accounting records to improve your business and drive growth. Are you building an annual budget and reevaluating on a monthly basis? Are you using Key Performance Indicators to make sure you stay on track towards your goals? Keeping up-to-date financial statements provides invaluable information about your business and interpreting that information properly is key to driving growth.
Here at Stephano Slack LLC, we understand the importance of accurate recordkeeping and maintaining up-to-date financial statements throughout the year. The financial statements are an important tool in running your business. We strive to partner with our clients to make sure they are getting the most value out of the information provided in their financial statements.