The festive season is upon us, but for small business owners, it’s not all twinkling lights and gingerbread lattes. As the calendar flips, the accounting dial cranks up to eleven. A flurry of tasks, from the mundane to the monumental, await, promising a fresh start in the new year. Yet, year-end often finds us swamped, juggling holiday cheer with mounting deadlines. “Overwhelm” becomes our middle name, and those crucial tasks languish on the back burner. Fear not, fellow entrepreneurs! This year let’s conquer the year-end crunch together. Here is your roadmap to a smooth transition and a prosperous new year: Gather all your income documentation for a comprehensive tax return:
- Think beyond your P&L: While your profit and loss report is important, remember it does not include everything that affects your taxable income. Keep track of personal expenses paid through the business.
- Loan payments can be tricky: Do not assume all loan payments are deductible. If you are paying back the principal on an asset you have already depreciated, only the interest portion counts as a tax deduction.
- Fix asset additions should be capitalized: Not sure if it is an expense or a tangible asset? Talk to your accountant about capitalization criteria for your organization.
- If you have not reconciled your books throughout the year, take the time to do so now. Review important financial documents like your income statements, balance sheets, cash flow statements, and profit and loss statements for anything that stands out.
- Use monthly statements to reconcile your cash, credit card, and loan statements. Review uncleared checks, resolve any inconsistencies, and ensure all your debts are settled. If you are self-employed, make sure you have fulfilled your estimated tax obligations.
- Never post, delete, or adjust entries in prior years. If you come across an issue with an entry in a previous year, please contact your accountant before making any changes.
- Some common documents include:
- Reconciled QuickBooks files with login information
- Year-end bank, credit card, and loan statements
- Payroll support such as:
- W2’s / W3 summary
- Yearly payroll detail
- If you are unsure if a document is relevant, please upload it anyway! We can help you to determine which documents are needed.
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Author: Jaime Martel, CPA, MBA
MANAGER - COMMERCIAL TAX AND ASSURANCE SERVICES
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