Wednesday, January 5, 2011

What needs to be done now that the year is over?

Happy New Year! The end of a year brings several things that business owners need to accomplish. Whether you do the work yourself or  your accountant helps you, the following list will help you to be sure that nothing is forgotten. 

1.       By January 15, 2011, anyone who has been paying estimated taxes needs to pay the final installment for 2010. This is sent in on Federal Form 1040-ES and for Wisconsin business owners Form WI 1ES.

2.       By January 31, 2011, 1099 Forms need to be sent to all service providers who are not taxed as corporations and you paid more than $600.00 in 2010. They must also be sent to any lawyers regardless of the amount that you paid them. For 2011, make it your policy to have all service providers fill out a W-9 before you pay their bill. That way you are sure to have their information come tax time next year.

3.       By January 31, 2011, W2’s need to be sent to all employees. Other payroll reports and returns that need to be completed by this date are the 2010 4th Quarter Federal Form 941 or annual Form 944, Federal Form 940, and for Wisconsin the 4th Quarter Form WT-6 and Annual WT-7 as well as the 4th Quarter UCT101 for the Department of Workforce Development. If you have not been paying in monthly or quarterly, payment will be due with these returns.

4.       By January 31, 2011, the sales tax return for either the month of December, the 4th quarter of 2010, or the entire year of 2010 is due depending on your sales tax filing status.

5.       Your Financial Books need to be reviewed for accuracy and completeness. Below are several areas that are critical to look at before you close your year:
a.       Accrue any year-end costs associated to payroll in 2010 which were not paid until 2011.
b.      Ensure all vendor bills are posted by the Dec. 31, 2010 date.
c.       Ensure all clients are invoiced for 2010 business.
d.      Adjust any outstanding receivables that are considered uncollectible against bad debt expense. Verify that all receivable reports are accurate and equal the Accounts Receivable account balance.
e.      Verify that all accounts payable reports are accurate and equal the Accounts Payable account balance.
f.        Reconcile all bank accounts, savings accounts, credit card accounts, and loan accounts.
g.       Conduct a physical inventory count and record adjustments.
h.      Adjust any prepaid items that need to be expensed.
i.         Calculate and record amortization and depreciation.
j.        Review asset and expense balances to ensure that all fixed assets have been accurately recorded. Also verify that the detail for assets is recorded in a fixed asset ledger.
k.       Adjust any prepaid deposits to earned revenue.
l.         Print and review year-end reports.
m.    Back-up your data.

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