Well, here we are at the start of a new year. This is the time of year that businesses make their yearly goals and set up new procedures. Below are some items we feel can help your business run smoothly and avoid some costly mistakes. Also, following some of these procedures now will make your life easier during year-end tax planning and tax time reporting.
BUDGET
Has your business sat down and set up a budget for the new year? The business should sit down and look at their projected revenues and then allocate each dollar of those projected revenues into a zero-based budget. A zero-based budget is where you take all of the income brought in and give it a specific category (expenses, debt, savings). A zero-based budget is a great way to help a company keep track of their expenses and stay on track. This can also help a company see where they can pay down their debt and or stay out of debt. It’s one thing to “do the budget”, but it’s another for the company to stay disciplined and actually follow the budget.
BUSINESS MILEAGE (55.5 cents/mile 2012)
Now is the best time to go out to your vehicle and write down the mileage. Write down the mileage now and at the end of the year. Keep a calendar of your business travel. There are a lot of useful apps for smart phones out there to help you keep track of mileage.
Get in the habit of logging your mileage so that you don’t play a guessing game at the end of the year and you are protected if ever audited.
ELECTRONIC PAYROLL TAX DEPOSITS FOR DECEMBER (IRS EFTPS site)
This week and next week businesses will be making their payroll deposits from December, if you are doing payroll yourself make sure that you select Dec 2011 for your December 941 Deposit. Also, when making your 940 payments for 2011 make sure you select 2011. Because we are in a new year, the defaults on the IRS EFTPS website are for 2012. Don’t worry if you accidentally make this mistake as you can cancel the payment, but this must be done immediately. So make sure you review your confirmations. Also, if you are using QuickBooks to do your payroll, make sure that you are clicking payroll update every month.
IRS FORM W-9
Every business should get in the habit of giving W-9’s to those they pay for services. W-9’s are IRS forms requesting those you pay for services their taxpayer identification. Based on the information they fill out and how much you pay them throughout the year then determines whether or not you have to issue them a 1099. It is a good habit to have the person fill out the W-9 prior to giving them their first check. This saves time during tax time and you see that you need to give them a 1099. You would be surprised at how fast someone can disappear or have memory loss when trying to get the 1099 information during tax time.
IRS FORM W-4
Employees have life changes during the previous year so it is helpful to update your employees W-4’s they have filled out in prior years. It is good to also make sure that you have a W-4 on file for all of your employees.
Make sure that your goals, budgets, and ideas for the upcoming year are clearly written down. Stick to them and make sure that they truly are your goals for the new year and not just your January to-do list. We would love to hear from you, let us know what ideas you are working on to help make your business more effective for this new year. You can leave us a comment here or contact us