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Small Biz Accounting Tips, Issue #001 -- ready for tax returns?
March 04, 2013
Hello small business owners!

Note from the editor:

Well, 2012 has past, and we're well into 2013. I've been knee-deep in W-2's and 1099's. How about you?

I've got some tips for you on those pesky forms, and some information on cash flow forecasting. At the beginning of a new year I like to plan ahead, think about where my business is going, and where I'd like it to be.

When I do that, I like to create an Excel spreadsheet (yeah, I love spreadsheets!) to map my thoughts and make them a little more real by putting dollar signs to them. I'll show you how.


W-2 Forms and 1099 Forms

When you're preparing these end-of-year forms, you need to make sure you have all your info right.

W-2 Forms

If you have an accounting software that prints out W-2 forms for you, print out a sample copy.

Get your payroll numbers in front of you, and gather your 1st, 2nd and 3rd Quarter Payroll Tax Returns too.

Do a pencil-in version of your 4th Quarter 941, 940, state unemployment, and local withholding tax returns.

Next, add those to the 1st, 2nd, and 3rd Quarters for your total wages, taxable wages, federal withholding, state withholding, and local withholding taxes.

Now, make sure those numbers match what is on the W-2 Forms. Those numbers have to match.

I've gotten letters in the past, telling me that the total wages on my 941 forms don't match the W-3 (W-2 summary page) and I had to go back thru the numbers and find out why.

So I learned this one the hard way. Make sure all 4 quarters match your W-2's before you let them out the door.

1099 Forms

On these forms, remember you need to send a 1099-Misc to any vendor you paid over $600 to, except corporations. You still need to send them to LLC's. I've had them argue with me but the IRS is pretty plain about this.

Also, if the business took a loan from you, or a partner, or maybe a family member, and you are just making interest payments until you can pay them back, they need a 1099-INT Form, if you've paid them over $10.

Remember above I was talking about thinking ahead to the new year?

If you decide you want to increase sales by 10%, or get a loan and purchase new equipment so you can expand into a new market, you can put that into dollars and see if it's feasible, or if you need more resources, or more employees, or whatever.

Check out the link below, and find out how to put your plans into a 12 Month Cashflow Statement. Put your future into dollars

Well, that's it for this month.

I'll be back next month with more tips and help for your small business bookkeeping.

Take care!


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