What should small business owners consider before closing their books and heading home for Christmas? Because of the diversity in small business transactions, a more complete answer can be provided if you’d like to call our office. However, some of the big picture items which are missed by small business owners are as follows:
1. Personal use of a business owned automobile. Go ahead and make at least a rough estimate of the miles in you daily commute. Include at least these miles in your W2 at the end of the year. Remember you can’t count the commute as business miles and IRS guidance requires this to be included in your W2.
2. Health insurance for an S-Corp owner. If you are an S-Corporation owner, make sure your final W2 includes your personal health insurance cost. You will not be charged social security tax on the cost of the insurance if it is done properly. Another IRS required W2 item.
3. Small business (less than 50 FTE’s) health insurance plans. The Affordable Care Act is still being tweaked for who or what is required for 2014, however, small businesses should be contacting their health insurance broker and make sure they get their plan renewed prior to December 31 to ensure you miss the big rate increases heading down the pike for coverage of pre-existing conditions.
4. Prior year Adjusting Journal Entries. You probably received adjusting journal entries with your 2012 tax return. If these have not been posted, then your balance sheet will not agree to the 2012 tax return. Your 2013 return preparation will take longer as we try to figure out why.
5. Reconcile payroll. The social security tax hot button is still on fire with the IRS. Make sure you have reconciled your payroll Form 940 and 941 to your income statement and balance sheet. This is the first thing they ask for when beginning an audit. Do it now while the year is fresh.
6. File Form 1099. Be careful with contractors and other service providers who have not filed out the appropriate forms for filing Form 1099. This is another hot button with the Service, so making sure you have filed ALL of these as necessary is very important.
Getting started early. Your 2009 return will fall off the grid with the filing of 2013, so let’s file early! Give us a call and let’s get on your schedule for early January or February. We can be reached at 314-993-4285.