Prepare to File 2017 Tax Returns Now

Prepare to File 2017 Tax Returns Now

It’s never too soon to start preparing to file your federal income taxes. The IRS will begin processing tax returns for 2017 on January 22, 2018. Tax season is a busy time but it doesn’t have to be a headache if you start organizing now.

Doublecheck your company files.

You need to supply your accountant with a portable copy of your company accounting software. Accounting software is a wonderful organizational tool, but the keys to good bookkeeping with any system are consistency and accuracy. Even the best bookkeepers make mistakes. Check your chart of accounts. Is each transaction posted how and where it should be? Correct any errors you find. Did you remember to post your adjusting general journal entries from last year? If not, do so immediately.

Next, start preparing for and accumulating copies of the paperwork your accountant needs to file your taxes. Here’s a basic list.

Forms W-2, W-3 

Employers must file Forms W-2 and W-3 with the Social Security Administration and furnish employees their W-2’s no later than January, 31. Companies with 250 or more employees must file electronically through the SSA’s Business Services Online website unless they have received an IRS waiver.

Forms 1099, 1096

Supply form 1099-MISC to independent contractors you paid $600.00 or more in 2017 no later than January, 31. Have your independent contractors fill out a form W-9 to furnish you with a Taxpayer Identification Number (TIN) and keep it on file. You will need this number to complete their 1099’s. File forms 1099 and 1096 by February 28, unless you are reporting box 7 Nonemployee Compensation. If this is the case, file by January 31.

Forms 940, 941

Supply copies of the Employer’s Quarterly Federal Tax Return (941) for each quarter and a copy of the Employer’s Annual Federal Unemployment Tax Return (940). Form 940 can be filed by February 10, if you made quarterly deposits. If not, file by January 31.

Also, give your accountant copies of any state withholding forms that apply to your business.

Estimated quarterly federal tax payments. 

Corporations expecting to pay more than $500.00 in federal income taxes usually make these payments.

Bank statements and loan documentation.

Include copies of business checking and savings account statements for the month of December, documentation for new loans acquired in 2017, and interest paid for the year on existing loans and lines of credit.

Did you buy new equipment or sell any old equipment, including computers, office equipment or vehicles? Include receipts and bills of sale for these items. This is also a good time to look over your insurance policies to make sure you are not paying to insure equipment that you may have sold or no longer use.

Sales tax reports and 1099-K.

If you buy merchandise for resale, you probably report and deposit monthly state and or local sales taxes. If this is the case, include copies of monthly sales tax reports.

If you accept credit card payments from your customers, you will also need to supply your accountant with a copy of your form 1099-K which you will receive from the company that settles your merchant payment transactions.

Inventory value, as of December 31.

Start prepping for inventory now, if that applies to you. Clean and organize your warehouse and discount old or damaged merchandise to move it out before the end of the year.

Corporate documents. 

Include copies of meeting minutes and waivers for the year, if applicable.

Also, include any documented charitable contributions as well as property tax and rental information.

Don’t be a last-minute filer.

Well organized books make filing taxes faster and easier for your accountant and less expensive for you. Knowledge of filing deadlines and requirements will help you avoid the added expense of penalties and extensions. Give your accountant ample time to review your information and ask for additional documentation by supplying it at least 6 weeks before the filing deadlines that apply to you.