It Is Not Too Early To Start Year-End Planning
Now is the time to start organizing your 2019 records and making sure your accounting system is up-to-date. Here are some suggestions:
- Take a final look at your 2018 tax return and tax documents – make sure that your accounting records agree with your tax return. Put your return in a safe place.
- Make sure all of your deposits and checks have been recorded through July 31, 2019.
- Reconcile your business bank account(s) for the first seven months of 2019.
- Organize your receipts for 2019. This could be alphabetically by the vendor or by the month.
- Consider scanning your receipts and saving as PDF files on your computer. Make sure you make a back-up of these files that is kept outside your home.
Ask questions – do not wait until tax time (usually in the next year) to ask questions about your 2019 tax issues. Most opportunities to impact your 2019 tax return will end on December 31, 2019. Do not miss your chance.
Get Ready for 2019 Year-End
It is August and summer is in full swing. The year-end is over four months away, it is not too early to start organizing your 2019 records for tax time. Here are some of my recommendations:
- Take a final look at your 2018 tax return and tax documents (such as W-2s, 1099s, K-1s, other receipts, and documentation). Put them in a safe place. My clients have access to pdf copies of their tax returns through my portal.
- Go through receipts for 2019 through July 31st and separate into “Tax Return” and “Other”
- Create a 2019 Tax envelope or folder and file your 2019 “Tax Return” receipts (in the envelope or folder from above).
- Consider scanning your receipts and saving as PDF files on your computer. Make sure you make a back-up of these files that is kept outside your home.
Ask questions – do not wait until tax time (usually in the next year) to ask questions about your 2019 tax issues. Most opportunities to impact your 2019 tax return will end on December 31, 2019. Do not miss your chance.
Do your numbers match?
If you run your 12/31/18 financial reports in QuickBooks (or other small business accounting software), do the numbers match your 2018 tax return (business return, Schedule E, or Schedule C)?
Did you get adjusting entries? This could be one of the causes. Many tax preparers do not give their clients adjusting entries. Another problem could be an adjustment to Accounts Receivable – it can be tricky to make adjustments to Accountants Receivable in QuickBooks.
If your business records do not match tax return, it might be time to have a conversation with your tax professional. Please feel free to [Contact Me] if you have questions or are looking for a tax professional.
Gift Tax – Who Pays?
One of the biggest misunderstandings about the Gift Tax is that the recipient of the gift pays the tax. Actually, it is the giver of the gift, that is responsible for filing a gift tax return and paying the Gift Tax. However, there are exceptions:
- The gift is less than $15,000 annually per person
- The gift is to your spouse
- The gift is to a charity
- The gift is payment of medical/education expenses and payments are made directly to the institution
Every person’s tax situation is unique. I recommend that you consult a qualified tax professional regarding your tax situation. If you do not have a tax professional, please click on the [CONTACT ME] tab and complete the form.
Happy 4th of July!
I hope everyone has a happy and safe 4th of July Holiday!
