End-of-Year Tax Planning: How to Lessen Year-End Stress
By Laura Melville
We are more than halfway through 2017 – and that means the fourth quarter is already on the horizon. When those final three months of this year arrive, it’s time for your business to focus on planning for 2018 in earnest. Unfortunately, many businesses wait to begin year-end planning until then, as well.
Your team will already have its hands full preparing budgets and mapping out your company’s strategies for the following year, and an end-of-year tax preparation-planning sprint only increases the stress level as the end of December looms. To prevent – or at least lessen – that end-of-year stress, here are a few proactive steps to take during the year to ensure the fourth quarter is a smooth one instead of a mad scramble.
- Don’t wait to send out W-9s until an arbitrary deadline set late in the year. You will need every vendor’s essential information – name, address, tax classification and tax ID number – to prepare and send any required 1099-MISC forms. The reporting date to the IRS and the recipient is Jan. 31 of the following year for any 1099 MISC reporting non-employee compensation in Box 7. If you wait until late in the current year to collect W-9 information, you are signing up for a tight timeline. Instead, send W-9s to subcontractors when you sign on with them. And to encourage them to return the forms quickly, state up front that payment can only be released once their completed W-9 is on file.
- If you are understaffed and find that your books need considerable attention at the end of the year, consider outsourcing your bookkeeping work. This work is very important, but you also need to stay focused on your business. If you don’t have the manpower or expertise on staff to put your best efforts into both throughout the year, consider outsourcing the bookkeeping portion to a third party. Not only will this free up valuable time, it can also offer a new perspective on ways to improve and make more efficient your procedures that have gone unchanged for years.
As a rule of thumb, the more you can get done throughout the year, the less stress you will experience during the countdown to the new year. So don’t wait – Dec. 31 is coming up a lot faster than you might think.
Laura Melville is an outsourced accounting supervisor at Wiss & Company LLP. If you would like to get in contact with Laura, you may reach her at firstname.lastname@example.org or at 973.994.9400.