Tax Time, Ready or Not

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It’s always a huge relief to many people who get their taxes done early. That gray cloud of stress that nags at you to get it over with can be gone in a matter of weeks instead of months.
The  deadline  is right around the corner, and here are a few tips to cross that task off your to-do list way before spring.
 
1. Catch up on your books.
If your books are behind, the first step is to get everything recorded so that your tax return will be accurate. With automated bank feeds and data entry automation, this is easier than it’s ever been before. If you have cash transactions or receipts lying around that your accountant doesn’t know about, be sure and get those pulled together so nothing is left out.
 
2. Make year-end changes.
Some companies may need additional year-end adjustments, and now is the time to make them. These include items such as loan balances if the interest adjustment has not been booked every month, depreciation and amortization, accounts receivable write-offs, accrual vs. cash basis adjustments, and possibly clean-up work. Have your accountant help you with these items.
 
3. Double-check vendor documents.
If you hire contractors and sent them 1099s, make sure you have the proper onboarding documents for these individuals which includes a W-9. You may also want to have a workers compensation certificate from them in order to avoid paying it yourself.
4. Note deadlines.
Get clear on the deadlines for your corporate, franchise tax, individual and any other tax returns that are required. Even though you might hire someone to complete and file your return, you’ll want to make sure the deadline has been met.
 
5. Stay organized.
As you receive your 2016 tax documents, keep them all together in a special place. Download them or scan them in and keep them all in one folder. If your tax accountant has a client portal, upload them as soon as you get them.
Your tax accountant appreciates getting your information as early as possible. The sooner you get the documents to them, the sooner the whole process can be complete. Even if you owe money and want to file at the last minute, you can still be complete with the process except for the filing which can be deferred.
Try these tips to reduce tax stress this winter and spring. And, as always, if we can help you with any of this, please reach out.

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The New I-9 Form

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New I-9 Form Mandated After January 22, 2017

i9

The I-9 form is used for employment eligibility when hiring new employees.  It is one of many forms that need to be completed when you onboard a new employee.
Effective Tuesday, January 17, 2017, the new I-9 form, which is dated 11/14/2016, must be used. 
 
The U.S. Citizenship & Immigration Service (USCIS) of the Department of Homeland Security (DHS) has issued a new Form I-9 Employment Eligibility Verification and instructions, which go into effect Jan. 22, 2017.
Both employers and employees are responsible for completing their respective sections of Form I-9. Under the provisions of federal law, employers must complete Form I-9 to document verification of the identify and employment authorization of each new employee, citizens and non-citizens, hired after Nov. 6, 1986, to work in the United States.
 
 Here is a summary of the changes:
  • Section 1 asks for “other last names used” rather than “other names used,” and streamlines certification for certain foreign nationals.
  • The addition of prompts to ensure information is entered correctly.
  • The ability to enter multiple preparers and translators.
  • A dedicated area for including additional information rather than having to add it in the margins.
  • A supplemental page for the preparer/translator.
The instructions have been separated from the form and include specific instructions for completing each field.  The revised Form I-9 is also easier to complete on a computer. To check to see if you are using the correct I-9, check the form’s date, which should be 11/14/2016.  If you are using the one dated 03/08/2013, you are using the old one and must switch to the new one.
You can get the new I-9 form here:
i9 form
The term employers refers to all employers, including those recruiters and referrers for a fee. An employee refers to anyone who performs labor or services of any kind in the United States for an employer in return for wages or other remuneration.
The term employee does not include anyone who does not receive any form or remuneration (such as volunteers), independent contractors or those engaged in certain casual domestic employment.
An employee must present to his/her employer within three business days of starting work for pay, documentation that establishes their identify and employment authorization. Questions regarding employment authorization eligibility can be obtained from the Handbook for Employers: Guidance for Completing Form I-9 (M-274). Specific instructions related to completion of Form I-9 can be found here.
Starting 1/22/2017, USCIS only will accept the 11/14/16 (new) edition of Form I-9. Until then, you can continue to use the 03/08/13 edition, or you can use the new edition if you wish. The edition date is located at the bottom of the page of the I-9 form and related instructions.
Remember: 
 
The new I-9 form must be on file for all employees along with the 2017 IRS form W-4.
 
 If you are using QuickBooks payroll you can find these forms in the Employee Center of QuickBooks!

 

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Start the New Year with a 2017 Profit Plan

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Are you ready for next year to be even better than this year?  If so, take a few minutes to reflect on the questions below and take action to set your profit plan for the next year.

Question 1:  What were the three best business things about this year?

No need to re-invent the wheel.  If you knocked it out of the park this year, can you wash, rinse and repeat these tasks in the next?

If you’re having trouble thinking of three things, here are some hints:

  • What apps saved you time and money?
  • Did you make some good hires?
  • Did you let go of a bad hire or two?
  • Was there a marketing campaign that really worked?
  • Were there any events you went to that generated great ideas?
  • Did you add or remove products and/or services?
  • Did you buy new equipment or open a new location?

Summarize the three best things that happened in your business for the last year and think about how you can repeat them to enhance your next year in business.

Question 2:  What were the three worst business things about this most recent year?

While we don’t want to dwell too much on our failures, we do want to learn from them.  Think about the three things that are causing you to lose time, money or gain stress, and decide if you can make changes for the next 12 months.

Question 3:  What vision do you have for your business in the coming year?

At the end of next year, what has to have happened in order for you to have a successful year?   Think in terms of metrics as well as intangibles, such as peace of mind and happiness.

Once you know your destination, the fun is in creating a roadmap to get you there.

Your Profit Plan for Next Year

If your vision includes financial goals, then creating a profit plan is one way to measure your progress throughout the upcoming year.  Start by deciding how much profit you want to make.  From there, you can compute your revenue goal and make a plan.  Then you can add expenses to complete the budget.  Here’s an example:

Let’s say you want to make $50,000 in profit for next year.  You can do that in a number of ways:

  1. Generate $500,000 in revenue and $450,000 in expenses.
  2. Generate $2 million in revenue and $1,950,000 in expenses.
  3. Generate $150,000 in revenue and $100,000 in expenses.
  4. And so forth.

From your profit number, you can create a revenue plan.  A revenue should include how many items you need to sell.  Like this:

No. of units Price Revenue
Widget A 3,000 $200 $600,000
Part B 100 $2,000 $200,000
Service C 700 $1,000 $700,000
Total $1,500,000

Once you have your revenue plan, you can fill in your estimated expenses.

You might be thinking that this sure sounds a lot like making a budget.  And it is.  But it’s far more fun to work on something called a profit plan than it is a budget.  And if you need us to do the number-crunching part, please feel free to reach out any time.

Here’s to a very happy and prosperous next year in business for you.

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Happy Holidays

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Wishing you the Happiest of Holidays

and all the Best in the New Year!

 

From all of us at New Business Directions

 

Rhonda, Wayne, Suzy, Kendra, Britney, Trudi, Kristen, and Freckles

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Five Money-Saving Things to Do Before Ringing Out 2016

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Hopefully you’re having a wonderful December with all of the holidays and parties this month. And if you’ve spent too much on gifts and decorations, never fear. Here are six ways to save on your accounting and taxes.
 Hurry, you only have until year-end to cash in a few of these tips:
1. Check your profits
After adjustments, are your books going to show a profit this year?
If you are on the cash-basis for tax reporting, you may want to try to increase business spending before year-end so you won’t have to pay as much in taxes.   Consider accelerating larger expenditures into 2016 to reduce your profits and therefore, your 2016 taxes.
If you pay with a credit card, those expenses are deductible when charged, even if you don’t have to pay your credit card bill until next year.  There are many tips on business deductions, so check with us to get the full benefit.
2. Eliminate payroll headaches
If your payroll system is causing you pain and suffering, consider switching. Year-end is the best time because switching costs are lower and year-to-date amounts don’t have to be entered. You’ll still want your old system to generate January’s W-2s, but if you start writing 2017 paychecks out of a new system, it will give you a clean break.  If you’re not sure what system to move to,
we can help.
 
3. Make January smoother
January is typically a bookkeeper’s busiest month of the year. Many tasks can be done early, such as checking to make sure your W-9s are current and ordering W-2 forms if they are needed. To avoid last-minute headaches, check with us to see what can be done early. It may help keep your accounting costs lower.
You may also want to consider automating more of your accounting system. Adding an app to your existing system may save you time and money in 2017.
 
4. Give to your favorite charity
Giving to your favorite charity may reduce your personal taxes if you plan to itemize your deductions on Schedule A of Form 1040.
There are many personal deductions that can help reduce your taxes, so check with us for options to minimize your tax payment.
 
5. Get ready for tax time
Start collecting the documents you need for tax time so they’ll be handy when you need them. You may be able to upload them to your accountant’s portal, or simply set them aside in a special drawer or folder.  Go through your receipts to be sure you communicate all your possible deductions. If you’ve had a major event, such as a move, new child, new marriage, or new job, be sure to mention it to your tax preparer.
When all of the parties are over and the relatives have left, try these tips to save time and money on your taxes and your accounting in 2017.
Happy Money Saving!

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