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Year End Reminders

Happy Holidays!

Following are a few reminders and tips for your business year end.

  1. There are new due dates for Forms W-2 and 1099-Misc. The due date for the recipient copy is still January 31 but the due date for the government copy has been moved up to January 31 as well.
  2. Form 1099-Misc should be filed to report payments of $600 or more to unincorporated businesses (there are also a few other situations where 1099’s are required). The IRS has increased penalties for failure to file Forms 1099-Misc.
  3. Business use of company owned passenger vehicles should be supported by a written record of exact mileage, preferably updated daily. Business miles, total miles, date and business purpose need to be substantiated as well as the vehicle expenses. The value of personal use should be added to the payroll and W-2 Form each year for all employees who drive company vehicles. Attached is an annual lease value table for calculating personal use.
  4. If an S Corporation pays for the health insurance for any stockholders (owning more than 2% of the company) the company paid premiums are supposed to be added to the stockholder’s payroll and W-2 Form, otherwise the IRS could disallow the deduction. The premiums are deductible on the stockholder’s income tax return so the deduction is not lost. (I know this one doesn’t make sense, but it’s the law!)
  5. State departments of revenue are stepping up enforcement of taxes. Have you looked at your sales and use tax procedures lately to see if you are in compliance? This should be done on a regular basis to avoid any tax surprises as well as the related penalties and interest. These departments of revenue are also looking to see if you are doing business in their state for payroll and income tax purposes. If you do business in other states have you looked at this recently?
  6. Do you have any bank covenants that you are required to meet? If so, do you expect to meet them?
  7. Compare your 2016 year to date profit and loss to your budget.  How does it compare? What can you do now to save taxes for 2016 or plan ahead for 2017?
  8. If your accounting records are a mess and you don’t know what your 2016 year to date profit or loss is let us know. There are new technologies available that make it easier to keep accurate records. Accurate and timely accounting records are the foundation for tax and business planning.

 

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