Using your year-end accounting checklist, you’re taking the time to ensure that your business is financially sound for the upcoming year, but where do you even begin? Here are a few essentials you should take care of as the year comes to an end.
Make the Most of Your Deductions
One crucial item on your year-end accounting checklist is the tax deduction. On your small business tax return, claiming all of your tax-deductible expenses will have a big impact, so make sure to do so before the end of the accounting year.
If you would like to deduct your company expenses from your taxable income, make sure to schedule them by the end of December. On the other hand, if you anticipate having more revenue to offset in the upcoming year, you might put off major expenses until January.
Examine Your Years’ Worth of Books
In order to get ready for tax season, your year-end closure procedure involves closing the books on the previous year’s finances. Your last year’s bookkeeping must be meticulous and complete in order to get there.
Sort related transactions together and keep apart any large annual purchases. Determine income, owner contributions, and refunds. All of your assets and obligations, including unprocessed accounts payable and receivable such as delinquent bills and outstanding invoices, should be fully documented. Verify again and adjust the number of unsold items in your inventory.
Make sure you go back over and review these financial statements as well. You will need to recall more to do this task accurately and effectively if you wait months to review these files.
Your small business’s bookkeeping may seem doable at first, but it can easily become too much to handle. Before sending in your data to be prepared for taxes, ask for help if you need it.
File Quarterly Tax Returns
You should be reminded to keep up with your quarterly anticipated taxes on your year-end checklist. These are advance payments for your taxes, calculated from what you anticipate owing in an end-of-year accounting.
The projected quarterly tax deadlines are as follows:
- First Quarter End Date: April 15
- Second Quarter End Date: June 15
- Third Quarter End Date: September 15
- Deadline for Quarter 4: January 15 of the subsequent year
Overpaying estimated taxes is preferable to underpaying. Underestimating your tax liability can result in a sizable tax bill at the end of the year and underpayment penalties. Dealing with a quarterly estimated tax specialist will help you make sure your company is tax compliant.
Calculate Your Liability in Advance
Estimating how much you’ll owe on your final return is a critical stage in year-end closing accounting. It helps to know roughly how much you’ll owe ahead of time, so you can get ready to file and pay.
Take your time figuring out your overall gross receipts. Understated income figures may result in fines from the IRS in the future, while overstated receipts cause taxpayers to pay needless taxes.
You wish to avoid encountering any of them. To get started, you can use your tax records from prior years.
To make sure you’re aware of all of your income sources and potential deductions, schedule a year-end accounting appointment. To determine your ultimate liability, you’ll need all of that information.
Organize Yourself for the Upcoming Year
Year-end celebrations are similar to closing a chapter in your own or your company’s history. You can close that chapter and start a new one that will help you succeed in keeping well-organized records.
Make sure you’re prepared for the new year by using your year-end accounting checklist. Now is the ideal moment to upgrade your system with the latest accounting trends, try out new accounting software, or make big changes to your process.
Consult a knowledgeable accountant
Make sure you schedule a professional consultation before the last minute in April. Now is the perfect time to speak with your accountant about year-end accounting for your company.
With your year-end accounting checklist, it’s a great chance to get ahead of the game and make sure you’re as knowledgeable and ready as possible. To make sure you cover all the bases, year-end planning is a good idea to discuss with your accountant.
You are in charge of your company’s money, regardless of how you choose to move forward. The present is the best moment to invest in future savings because it takes time to file your small business taxes correctly.
Our Bookkeeping Experts are here to help.