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Year-End or Year Beginning?

12/8/2021 - By Constance O'Donnell

For most business owners, December is spent trying to keep their heads above water. “Do we have enough inventory? Do we have enough people to serve our customers (or clients or patients)?” It’s hard to plan for the end of the year or the beginning of the new year when you are trying to plan for the next day.

We know keeping your business growing takes planning. Let's take a quick look at what savvy business owners should be considering.

  • Ensure those Christmas and year-end bonuses you plan to pay in December are reported through your payroll company, even if they are noncash. All employee compensation must be included in their W-2. 
  • If you are an S Corporation, have you provided your payroll company with the amount of health insurance and other fringe benefits that need to be added to the W-2s of all shareholders owning more than 2% of the stock? To amend W-2s costs additional time and money and being able to take the health insurance deduction on your personal income tax return is worth the time.
  • Ensure your payroll company has the correct social security number and address for all employees - particularly those that left during the year.
  • For the unincorporated vendors whom you have paid over $600, do you have a Form W-9 with their address and employer identification number to prepare the Forms 1099 and the Forms 1099NEC? Those are due on January 31.
  • Are you ready to inventory your materials and supplies for the tax work, if needed?
  • Have you reviewed your accounts receivable for uncollectible items?  
  • Have you reviewed your accounts payable for duplicate payments or bills not required?
  • Have you purchased and installed any large fixed assets to enable you to take Section 179/bonus depreciation on these items?  

And if those items are not enough, let's talk about planning for the year beginning on January 1.  

  • Health insurance rules are constantly changing. Have you contacted your carrier for the latest guidance for your employees?  
  • Have you considered adding a Health Reimbursement Account or a Flexible Spending Account for your employees?  
  • Are you considering a retirement plan for you and your employees? If so, what type of plan will fit your needs and your budget?
  • Are you paying your staff based on the latest minimum wage regulations?
  • Do you need qualified assistance in your office with bill paying and accounting?
  • Do you have questions on your personal investments?

Questions?

We are here to assist and guide you. We even have Year-End Tax Planning Highlights for Individuals and Businesses to help identify opportunities for reducing, deferring or accelerating tax obligations. At Saltmarsh, Cleaveland and Gund we have the knowledgeable staff to advise your firm - large or small. Let us be your Trusted Advisor!

About the Author | Connie O’Donnell

Connie is a senior in the Tax & Accounting Services Department of Saltmarsh, Cleaveland & Gund. Prior to joining Saltmarsh in December 2014, Connie worked with a local CPA and consulting firm performing a variety of tax and accounting functions for business and personal clients, including preparation of corporate, non-profit and individual tax returns. She began her career in public accounting in 1993.


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