We're in the second half of 2017 folks! Once the New Year arrives, it won't be long before you'll have to file taxes again. Want tax time to be a little less painful this year? Check out these four goals that are broken down, week by week, to have you on your way to an easy, breezy tax year!
Since all official tax documents are due out by January 31st, if you use this timeline, you'll have everything ready to go by the time they reach your house. Well, now aren't you on top of things?!
Week One: (Complete by January 11th) Wrap Up Your Paper Trail
Did you know you need to keep copies of receipts, invoices, canceled bills, etc.? Your bank account is not going to be enough proof for your business deductions in the case of an audit. Physical or digital copies of receipts must be kept for a minimum of 2 years following the tax period. (So, for 2017 receipts, you need to keep them until April of 2020)
By the end of next week, make it a goal to have all your receipts filed in one place. I recommend an accordion file separated by month. Shoeboxes are okay, but if I find you, I may throw spaghetti noodles at you. Take care of your receipts like you would take care of your prints!
Do you need to send out any 1099s? 1099s are issued for services performed by independent contractors (and many other things, but this is probably one of the only scenarios that may apply to you). Did you pay any ONE person more than $600 this year? You need to collect a W9 from them, found here: http://www.irs.gov/pub/irs-pdf/fw9.pdf
and issue a 1099, instructions here: http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
Also, if you had any giveaways with prizes over $600 coming from just you, you need to issue a 1099 for the cash value of the prize. If you had multiple vendors involved in the giveaway, and the total value was over $600, but no one prize exceeded that threshold, a 1099 does NOT need to be issued.
Need help with any of this? Qualified Accountants and Bookkeepers are worth their weight in GOLD. Ask around at business networking groups or local government offices for a referral.
That's the end of task one! Stay tuned for next week's goal!