Before you let the new year carry you away, take care of three important year-end accounting tasks.
1. Run your year-end reports on paper.
There are four important types of reports to document your important business info for the year. Put them on paper to protect against changes in software systems, lost data, or other vagaries of modern technology. Store them off site.
Run them for January 1 through December 31. Some are really long, so you may want to run them month by month to break it up.
I’ll also list the report names in QuickBooks, although I’m sure any software has its own equivalent.
- Your basic financial position: Profit and Loss, and Balance Sheet
- Totals for tax filings: Income Tax Summary
- Detail of every transaction: Transaction Detail by Account
- Important payroll tax totals: Employee Earnings Summary
The payroll tax totals protect you in case an employee ever questions withholding, perhaps even years after the fact.
2. Submit your required tax forms
In the USA, you’ll have three basic forms to tend to before January 31:
- W2: one form for each employee, and one form W3 as a summary of all employees
- 940: year end payroll report
- 1099-Misc: one form for each independent contractor you paid over $600, and one form 1096 as a summary of all 1099’s.
Each of these applies only if you have paid employees or independent contractors.
Be sure to check with a tax professional, like our own Maesz, for more specifics on tax filings.
3. Do an annual backup
And store it off-site. Consider taking advantage of one of the many great online backup services. A good list is at Storage for Nothing, Backup for Free. Carbonite is too new for the list, but gets good reviews. If you prefer to keep your backups off the internet, Comodo offers free backup software.
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Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.