Well, it’s the time of year to think about taxes and wrapping up all the paperwork! There are many activities that management needs to take care of at the end of a year. Here are a few tips (or reminders) to help make sure the new year starts off right for your small business.
#1 – Get organized / Make a budget
Organization is key! If you run or own a small business, you know what it’s like to wear many different hats. The more organized you are, the easier your year will be. If you have not done so in past years, please consider making a budget or at least a sales forecast for the upcoming year. It can be re-evaluated as the year goes on, but it will give you a good guideline of what to expect with expenses and income; as well as, help forecast cash flow and overall company growth.
#2 – Complete and file 1099’s
These are tax forms that show money paid to independent contractors or other workers not on your payroll. Also, this includes attorneys, janitorial companies, landscaping services and third party accounts. A 1099 is only filed if the person received $600 or more in the tax year. These forms are normally due by the end of January each year.
#3 – File Sales, Use and Withholding Taxes
This can vary by state, but please look at your state’s website to see what you are required to file and the deadline. Many of these are due by mid to late January so do not delay!
#4 – Send out W-2’s
This will likely be handled by your Human Resources department….with a small business, that may even be the owner or a third party company. The W-2 is a form for each employee that shows his/her total earnings, as well as taxes, state and federal, withheld from the employee. Each individual will need to receive this from his/her employer in order to file his/her own taxes. These forms are required to be sent to employees by the end of January.
#5 – Assess your employees and consider giving bonuses
The new year is a perfect time to re-evaluate your staff and workforce structure. Look at all the positives from the past year. What could you do to improve the company culture or to show appreciation to your employees? How could peer feedback be incorporated to help everyone improve in their roles. Consider an employee assessment, such as a 360 degree review tool, to help in this area.
Try to implement a performance-based or profit-sharing-related bonus if you do not already have a plan in place. Or, if a monetary bonus is not an option, look into other options to reward them for a year of hard work and progress, such as a staff retreat or nice lunch out of the office. This will give everyone a sense of accomplishment and boost them to be excited about the new year ahead.