Can you believe 2016 is over? It’s hard to believe it went by so fast. There is still a little time left to make moves to finish off the year strong. Here’s a list of things to do to wind down 2016:
- Get your bookkeeping up-to-date for the year. If you fell behind, now is the time to catch up. There is no way to make any last minute moves unless you know where you stand at this point.
- Make major purchases. If you’ve been contemplating buying a car, new computer, or other big equipment for your business, now is the time. You can take advantage of accelerated depreciation and get a full deduction for the entire cost, even though you purchase it in December!
- Check your payroll. S-corporation owners must run payroll. This is a big “red flag” for the IRS when you don’t. If you have a lot of cash maybe run yourself a bonus payroll. This is good if you need to show a higher salary on a W-2 or increase your Social Security contributions. This is also a great way to pay in additional tax if you missed your quarterly estimated payments – and avoid penalties.
- While on the subject of payroll – S-corporation owners need to make sure their health insurance premiums are included in Box 1 of their W-2. Contact your payroll company to make sure it is correct.
- Set up or make a contribution to your retirement account. Retirement contributions will reduce your tax bill and set you up for financial success for the future. Examples of these kinds of accounts are a SEP, simple IRA, or 401(k).
- Make sure you have W-9 forms for all of your contractors. The new deadline for filing 1099-MISC forms for 2016 is January 31, 2017!! Make sure you have all of this information now so you are ready to hand over that information to your CPA in the beginning of January. You need to file 1099-MISC forms for any individual, partnership, and certain LLCs that you paid over $600 to in 2016. You also need to give 1099-MISC forms to any lawyers that you paid in 2016, and possibly your landlord too.
- Write off business gifts. This is especially useful during the holidays. Just keep in mind only up to $25 can be written off.
As always, if there is anything I can do to help please feel free to reach out!