There is nothing more certain than death and taxes, or so they say. But even with that certainty, catering and event professionals often wait until the last minute to get their financial act together. Here are tasks you should do this month to get ready for April 15th well in advance.
Many people have the shoebox-of-receipts when they march into their accountant’s office. The reality is that receipts aren’t needed by your accountants. They need numbers. You should be using accounting software (like Quickbooks) to manage your bookkeeping and you’ll want to make sure it’s updated and reconciled through December 31st. Your accountant will ask for your profit & loss reports and possibly your balance sheet. Or, they may access your accounting software directly.
If you’re newish to business and don’t have much sales volume to justify Quickbooks yet, you’ll want to create a spreadsheet of all your sales and all of your expenses for your accountant. Categorize those expenses into ‘type’ (food costs, hard goods, advertising expense, etc.) You can download transactions from your oniline banking and categorize from that data to save a step.
So, what about those receipts? You’ll need them in case you are audited. Hold onto them for 7 years. I like to stash away old receipts in my garage with a destroy date labeled on the box. And, once a year, I give a box to my kid to sit with the shredding machine for several hours.
Schedule a call with your tax accountant before it’s too busy
Tax laws change from year to year, and your accountant is studying ways to save you money on your taxes. In spite of them reading your financial reports, they may not know everything that happens in your business and personal life. And, having a call with them to discuss these changes is an important part of your ongoing tax strategy. Junk an old freezer? Have a baby? Move into a new home? Lease a delivery truck? Pay for daycare? These are the types of changes that may not be readable in your reports and can have a big impact on taxes. Keep in mind that a lot of the tax credits you’re entitled to impact your personal life (child care tax credits for example).
Registration for Catersource 2020 is now open! You won't want to miss it!
Be proactive in your communication with your tax accountant because they may not always be so with you. (Hey – their head is in the books.) However, April is not the time to get tax advice from your accountant. They’re in the thick of their filing season, and likely won’t have much time for consultations. It’s best to get all your tax advice well in advance of the filing date. Plan this meeting for no later than February.
File all your contractor & employee paperwork ASAP
The deadline on W2s and 1099s was January 30th. If you haven’t done so yet, get all of these forms out the individuals that work for your company ASAP. You may incur some penalties for being a tad late. But, they’ll continue to compile if you delay any more. Your employees need their W2s so that they can file taxes in time too.
Doing these three things now can save you a lot of stress in April. Be proactive with this now and save yourself (and your accountant) a little grief. And, while you’re at it, think of how you’ll stay on top of your accounting year-round so that your next-year’s filing goes even smoother!