A Business Checklist For Tax Day

Welcome back! We hope you have been learning a thing or two about your business accounting practices while reading our blog posts because now is the time to put all your knowledge into action – it’s time to file your taxes! We have many new clients who feel rather unprepared when springtime rolls around so we have compiled a short list of must-haves for filing your business taxes to help you get started. Here is an easy to follow checklist for tax day:

• Gather all financial documents: This includes income statements, balance sheets, and expense reports.

• Organize receipts: Throughout the year keep track of all receipts and invoices related to business expenses.

• Review employee payroll records: Double-check that all employee payroll records are accurate and up-to-date. Prepare all required forms such as W-2 and 1099s.

• Determine any deductions: Identify all deductions your business may be eligible for, such as depreciation, interest, and charitable donations.

• Check for any tax law changes: Keep up-to-date with any changes to tax laws that may affect your business.

Now, that might sound like a daunting list, and we agree entirely. Luckily, here at Moose Creek Bookkeeping, we have mastered the art of accounting and guiding business owners like yourself through the muddy waters of preparing for taxes. We have helped countless companies become more organized and accurate when it comes to year-round bookkeeping, resulting in a relatively stress-free tax season.

In addition to the items listed above, there are a dizzying amount of documents necessary to file a corporation’s taxes, depending on the nature of your business and how your sole proprietorship, corporation, or LLC is set up. Although our work is different from the work done by a CPA, we are knowledgeable on exactly what paperwork your business is expected to fill out. Working alongside your CPA, we will make sure you have everything necessary to file your business taxes, avoiding any costly mistakes. Some oversights can rack up sizeable penalties including misclassifying employees, missing tax deadlines, and losing track of receipts… all of which we are here to resolve promptly and effectively.

By joining our esteemed client list, you will be able to gain accounting knowledge, while also gaining time, as we handle the nitty gritty of bookkeeping – so you can focus on your passions. Reminder, it’s never too late, or too early in the year to seek help with your books. We offer a judgment-free zone guaranteed to improve your books and your confidence in them.

Sending Out 1099s: Don’t Miss The Deadline!

Happy New Year! January is a very important time for many of our clients because it’s time to buckle down on taxes, and they rely heavily on independent contractors. Have you paid someone, or been paid over $600 in 2022? Then, this article is for you.

Tax season can be daunting for any business, but it’s especially important to make sure all of your 1099 forms are sent out by the January 31st deadline unless you’re hoping for a letter from the IRS. In this blog post, we will discuss the consequences of missing the deadline for sending out 1099s, how employees can be penalized, and what an employee can do if the company doesn’t send out 1099s by the deadline.

When a business pays an independent contractor over $600 they are required to report that payment to the IRS, and so is the contractor. Failure to send out 1099 documents by the deadline can result in monetary fines, interest on late payments, and possible criminal charges. At Moose Creek Bookkeeping we specialize in accounting for businesses who regularly hire 1099 independent contractors, so we are versed in the timing, accuracy, and execution of 1099 documents.

According to TurboTax, “If a business fails to issue a form by the 1099-NEC or 1099-MISC deadline, the penalty varies from $50 to $280 per form in 2022. If a business intentionally disregards the requirement to provide an accurate 1099, it’s subject to a minimum penalty of $570 per form in 2022 or 10% of the income reported on the form, with no maximum.” That sounds a little intimidating, we agree – so we are here to help.

Now, if you’re a contractor and your employer fails to send out your 1099 by the deadline, you may be in a difficult situation so it’s important to communicate with your employer if the end of January rolls around and you have yet to see your document. If you fail to report your income, the IRS can fine you 20% of the unreported income, plus the originally owed amount. Whether your employer sends out a 1099 or not, it’s up to you to report your income, even if you have to estimate to avoid any penalties.

So, as you’ve learned, the timing is everything when it comes to issuing and reporting 1099-NEC or 1099-MISC. If you are unsure about the difference between the two, or just have basic accounting questions, please reach out. We take pride in providing the most accurate books to our clients whether they are a large company with 100 independent contractors or a small company with just four W-2 employees, we can bring accuracy, clarity, and confidence to your books at tax time and beyond.

Why Do I Need To Save My Receipts?

Welcome back! The cool Fall weather is finally arriving marking the beginning of the holiday season. As Christmas trees are already on display we are reminded that our favorite time of year is just around the corner… TAX TIME! Not your favorite, you say? Are you worried you haven’t been organized enough during the year? Well, you’re not alone. Most people dread tax time because they are unprepared. We are here to discuss the number one way you can prepare for tax time: Saving your receipts. Saving your receipts isn’t optional, it’s crucial to your business and offers peace of mind if you’re up late worrying about the dreaded IRS audits.

Year-round, Moose Creek Bookkeeping is helping companies large and small learn how to prepare for tax time and the very first lesson we teach is “save your receipts”. This is because your receipts contain critical information that might be lacking if you are only looking at a bank statement. Receipts contain the date, description of good/service, vendor, price, taxes/fees, and mode of payment. Your bank statement only shows the date, vendor, and price, which isn’t adequate, according to the IRS. You must be able to show a detailed view of all expenses to prove they were legitimate. The IRS cannot discern between a $400 Epson Printer versus a $400 Cat Tree.  You will need to prove the purchase was an office expense and not a luxurious cat condo for Mr. Fluffpants.

Now, we understand keeping track of receipts is no small feat. As a small business, we use and recommend a digital receipt keeper called Hubdoc. Hubdoc has been a game-changer for all our clients who chose to use it. It does require input from you in the form of a photo or upload, but that’s where your work ends. Hubdoc reads your receipts, gathers critical information, and magically creates usable data – no more data entry! This program has saved our clients countless hours with its ease of use and friendly interface. Even our old-school, paper-saving clients have made the change to digital receipt keeping.

In addition to using a digital receipt tracker, we always recommend adhering to best practices to keep track of receipts before you need to enter them in Hubdoc. Here are some tips we offer to all our clients:

• Always write a note at the top of each receipt about what the expense was for. This can also work as a reminder for future reference. Hubdoc features a ‘notes’ section for this exact reason.
• Make sure the receipt contains all the necessary info. If it is lacking information, promptly make a note, to not forget.
• Supply ‘receipt bags’ to employees to aid them in receipt organization and emphasize the importance of receipt retention.
• Keep telling yourself that all this record-keeping will pay off in the event of an audit. All your hard work will benefit your business in the long run.

Please reach out at any time to set up a discovery call with us. We’d love to talk about how we can help your business improve its books, aid in receipt management, and give you peace of mind when it comes to accounting. At Moose Creek Bookkeeping we are dedicated to teaching you the best accounting practices, offering solid advice, and giving you the tools to build a strong financial foundation that can weather any storm that may come; including an audit.

Now that 2021 is over, what does this mean for your small business? and what your business goals?

While many people focus on celebrations and new year’s resolution this time of year, small business owners also need to focus on year-end business planning. This includes both preparing for the new year, AND taking reflection of 2021!

But because the end of the year is so hectic, it’s not always easy to keep up with all the end-of-year tax preparations you should be doing to wind down 2021 and plan for 2022. We have put together a checklist to help with this process!

Gather all the documents you can find in your business.

1. Bank statements (12) for each account -to calculate income
2. Receipts associated with the business expenses – Expenses
3. Receipts of your contributions/distributions to the business
4. Loan, line of credit or lease agreements (this could be for equipment) – Liabilities
5. Fixed Asset information and documents (business property, equipment, trucks) – Assets
6. Sales tax information – Liabilities
7. Mileage or car/travel expenses – expenses/deductions
8. Home office expenses – expenses/deductions
9. Payroll information (W9 for contractors and W-2’s and I-9’s for all employees) – Liabilities
10. Estimated tax payments – Owner’s distribution – Liabilities

Always check with your CPA or Tax Prep for the list of documents needed but this should get you started on the right track for tax season.

Now let’s talk about what your business goals are for 2022?

Have you made your goals for 2022 and looked at how you did with your goals last year? Have you crushed your business goals and have huge goals to grow this year?

This is a great opportunity to connect with a bookkeeper to help you understand your financials and create realistic goals for 2022. With our advisory services combined with monthly bookkeeping you can take your business to the next level!

If you have been considering hiring a bookkeeper, let our team at Moose Creek Bookkeeping show you how our custom, outsourced bookkeeping services offer a better way. Call us at 346-298-2252 or schedule a free consultation on our website.

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