2013 is coming to a close, which means taxes will be due soon. If you are a small business it is important to meet with your tax professional BEFORE the end of the year to review your current accounting methods, any changes in your business or in the tax codes, and to make sure you collect all of the correct information and documents to prepare your taxes. A good place to start organizing your tax records is gathering the information for all of your contracted service providers.
If you paid an individual or company over $600 for services, you will need to issue them a 1099. You should try to acquire this information as soon you can, preferably as soon as you contract the service. If the contractor does not give you a copy of their W-9, you can download a copy and give it to the contractor to fill out. It is important to make sure that employee or subcontractor expense reimbursements are not included on 1099's or W-2's.
QuickBooks will walk you through completing your 1099's. It is a good idea to create a custom field in your Vendor records to indicate whether you have received a W-9 from each Vendor. Lucky for you QuickBooks is also capable of attaching an electronic copy of the W-9 to the Vendor's record.
If you have been using your QuickBooks software correctly and have done a good job of maintaining your books, all your Vendors should be well on their way to receiving their 1099's on time.
DOUBLE CHECK YOUR NUMBERS
If you are a contractor, make sure that you look over every 1099 you receive. Do your records match your clients records? The 1099 is what the IRS will be expecting you to report as income. If it is miscalculated, the IRS will be wondering why your tax return did not match up to what was reported.
Tackle a few organizational steps each week, to get your business on track for a stress-free tax time this year. If you cannot find the time to take care of these important tasks, hire an accountant to do them for you. It is more important than ever that you take good care of your bookkeeping and maintain accurate records, in case you need them for an audit.