As the end of the year approaches, it’s time for small business owners to prepare for one of the most critical seasons: Tax Time!
Taking a proactive approach can save you time, reduce stress, and possibly uncover new tax-saving opportunities. This comprehensive checklist is designed to help you tackle your year-end responsibilities with ease, from contractor management and payroll reporting to document collection and deadline tracking. By following these steps, you’ll set yourself up for a smooth and successful tax season—and ensure that nothing slips through the cracks.
General Year-End Planning for All Small Businesses
- Create a Year-End Plan: Evaluate how to close the year effectively, identifying new practices to implement for smoother financial management not just this year but into 2025.
- Organize Financial Information: Decide on a clear method to provide all relevant financial data to your accountant. For example, using QuickBooks or a structured spreadsheet (Excel or Google Sheets).
- Compile Revenue and Expenses: Ensure that all revenue and expenses are categorized and recorded. This is essential regardless of filing as a Schedule C, 1120, or 1120-S.
Contractor Management (1099)
- Collect W9s for Contractors: Ensure you have W9 forms for all contractors paid over $600 for non-professional services.
- Prepare 1099 Forms: Have all 1099 forms ready to send out by January 31.
- Define “Contractor” Scope: Confirm that all non-professional service contractors meeting the $600 threshold are accounted for.
Employee Payroll & Reporting (W2 and 941 Forms)
- Confirm Filing of 941 Reports: Verify that all quarterly payroll tax filings are complete.
- Update Employee Information: Ensure all contact information (especially addresses) for current and past employees is up-to-date.
- Prepare W2 Forms: Issue W2s for employees by January 31.
Business Returns Based on Filing Type
- S Corporations (1120-S) and Partnerships: Confirm payroll filings if you are on payroll. March 15 is the deadline for S Corporation and partnership tax returns.
- Sole Proprietors (Schedule C) and C Corporations (1120): Organize revenue and expense data in preparation for your April 15 deadline.
Tax Document Collection & Expense Tracking
- Prepare Asset Documentation: For any assets over $1,000, such as equipment or vehicles, locate receipts and loan documentation.
- Gather Mailings: Save any mail labeled as tax-related from January through March to give to your accountant.
- Notify of Address Changes: Inform relevant entities of any address changes to ensure all tax documents are sent to the correct location.
Investment and Other Income Documentation
- Investment Statements: Provide complete investment tax statements without deleting any pages. Include links or other documentation provided on statements for your accountant to access.
Dependent Verification (If Applicable)
- Provide Dependents Documentation: Supply supporting records (like school or insurance documents) for dependents’ claims, as IRS scrutiny has increased.
Final Tips for Efficient Filing
- Organize Documentation for Faster Processing: Avoid piecing together information to ensure quicker processing by your tax professional.
Preparing for tax season doesn’t have to be overwhelming. With this checklist, you have a reliable tool to keep you organized and compliant as you close out the year. Whether you’re a sole proprietor, an S Corporation, or managing a team of contractors, taking the time to review these items can make all the difference. Refer to this guide as you finalize your financials, meet deadlines, and ready your business for the new year—letting you focus on what matters most: growing your business and achieving your goals.