End-of-year financial organization

Financial organizationThe holidays are upon us. Christmas lights are twinkling, store registers are dinging, and red kettle bells are ringing. The list of things you want to do seems as long as Santa’s, so it’s easy to forget this time of year also signals the end of the tax year for most folks.

Before you find yourself doing the January tax prep scramble, use these helpful tips to get a head start!

Get Forms Filled Out Now

A previous blog talked about the documents needed from workers. While W-4 and W-9 forms should already be on file, now is the time to check that those forms are on file and accurately filled out with names, addresses, and tax ID numbers. W-2 and 1099 forms must be in the individuals’ hands by January 31. If it’s January when you discover there is a missing form, you’ll be scrabbling to make the request and receive the response in time to make the deadline.

Now is also the time to check payroll and earnings reports to ensure that wage and tax data is accurate to date, and that all manual and voided paychecks have been properly accounted for. If you outsource payroll processing, your account manager will help you with this. After all, they process, but you are responsible for accuracy.

Do a Receipt Roundup

Save yourself future headache by gathering all your receipts in one location. Maybe it’s something as simple as a shoebox, or as organized a monthly accordion file. Whichever it is, having hard copies of your expenses is a must.

Here are a few things to make sure you do.

  • Gather receipts for all expenses including fuel, business-related meals, and office supplies.
    Note: I highly recommend that business meal expenses receipts include the name(s) of those present, their company/organization, and the topic of discussion. If you are audited, this area is ripe for the IRS.
  • Mileage matters! If you’ve been keeping a mileage log, make sure you include it. This is another ripe area!

Why It Matters

Spending time organizing your paperwork in December can make a big difference during tax time. This early preparation saves your accountant time, and thus saves you money. It also allows you to project your tax liability, which may help you decided whether or not to make purchases before the end of the year. Either way, when January rolls around, you’ll be glad you got a jump start on tax preparation.

Happy organizing!

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