Amidst the year end holiday hustle and bustle, no one, except your accountant, looks forward to year-end tax reporting. For many small businesses, your company’s finance and tax manager is YOU. Until you can afford to fill that position with a for-hire or in-house professional, it behooves you to take advantage of all the FREE help you can get. One such source of reliable resource is the US Internal Revenue Service. Yes, the IRS has the final say so on what must be reported, so start educating yourself from the comfort of your office chair with a series of small business tax videos designed with you in mind. The more you know about allowable deductions and reporting requirements, the better. http://www.irsvideos.gov/SmallBusinessTaxpayer/virtual workshop
If you aren’t using accounting software, slow holiday office hours can be an excellent time to learn more about accounting software, which is surprisingly easy to use and affordable. It’s important to do a little research to help determine which programs - and there are dozens of them - would best serve your needs. For example, is it updated often, upgradeable as you expand from one-man shopkeeper to an employee operation? Read independent user reviews too. Here’s a good place to start: http://accountingsoftware.about.com/od/accounting-software-reviews/a/Accounting-Software-Reviews-BasicTo-Advanced-Software-For-Small-Businesses.htm Also check your industry association websites for
recommendations and deals. Vendors often court your sector, offering association members discounts on software packages tailored to your specific industry.
Companies with employees would be well advised to verify employees’ and 1099 contractors’ tax information. In our mobile society, addresses change; folks who married, had children, divorced or lost a spouse may not have updated their deductions. It’s a good practice to review this information before year-end and definitely before W2’s are generated. Human resource giant ADP offers timely
tax advice to employers in this article: http://finance.yahoo.com/news/adp-r-offers-important-end- 140000468.html;_ylt=A0LEVreGJZNUa.AAZnUPxQt.
The post-holiday sales are excellent ways to stretch your purchasing dollars and upgrade your office equipment. While you recover from those holiday meals, peruse the shopping inserts and online specials for post-Christmas and end-of-the-year deals on computers, printers and office supplies. Consider taking a deduction for donating still usable equipment and electronics to local charities. Take a snapshot of your donation and be sure to get a receipt for reporting purposes.
Speaking of sales opps, year-end is a great time to update your employee uniforms or begin a corporate identity while apparel is on sale. Having a signature look can enhance your company image and advertise your company name at a nominal cost. Stock up now on sweaters, dress shirts or polos to have screen printed or embroidered later. Plus it’s deductible!
The lesson here is don’t wait until April 14 to think about it. Use a little of your holiday downtime to make bookkeeping and tax reporting a little easier, more accurate and less stressful in the long run.