tax season – Incline Business Essentials

As we approach the end of the year, it’s time to start thinking about wrapping up your bookkeeping. Yes, I know what you’re thinking – “Finally, a chance to put my accounting skills to use!” But before you break out your calculator and spreadsheet wizardry, let’s talk about what this will entail.

Well, dear reader, I have some delightful news for you. As you stand on the precipice of spreadsheets and numbers, there’s a trustworthy ally ready to swoop in and carry some of that bookkeeping weight – Incline! That’s right, you’re not alone in this numerical forest. Incline will come with its accounting superpowers, ready to tackle the tangled jungle of receipts, invoices, and tax forms. So hold off on that emergency coffee order and remember, Incline is here to handle the heavy lifting. Breathe easy, keep your calculator at bay, and let’s move on to the next step, shall we?

Gathering The Essential Documents

You’ve got Incline by your side, and now it’s time to bring in the artillery – your essential documents. Think of this as a treasure hunt, only instead of a buried chest of gold, you’ll be unearthing paperwork. First things first, did you make any big purchases or sales this year? Are there any new flashy cars, fancy equipment, or items that had you parting with more than $2500? If so, you’ll need to rustle up the purchase documents. Your CPA will need copies.

Bringing in the Big Guns: Final Loan Statements

Now that we’ve dug up the treasure chest of purchase documents, it’s time to gear up for the next level of our financial scavenger hunt – Final loan statements. These are like your report cards but for your debt. They show how well you’ve been managing your loans. Only this time, instead of grades, you’re looking at the interest and balance of the loan, specifically as of 12/31/23. Your CPA will need these to understand how much interest you can write off. So, dig through your files, drawers, email inboxes, or wherever you stash these. And remember, each one you find brings you one step closer to completing your year-end bookkeeping. Put on your adventurer hat, and let’s get to it!

Time to Send Us Your Tax Documents: The Grand Finale

Now that you’ve excavated your final loan statements, and your CPA has stopped crying tears of joy, it’s time for the grand finale. You’ve reached the pièce de résistance of our financial adventure – sending us your tax documents.

Your tax documents are like the secret sauce in your financial burger, the cherry on top of your accounting sundae. They include W-2s, 1099s, 1098s, K1s, and all other tax forms that the IRS loves to pore over. So, it’s time to channel your inner detective and gather these crucial documents.

These little nuggets of information are crucial for us to help you file your taxes. Remember, like a good detective, no piece of paper is too insignificant! Send us all documents that carry the information needed to file your taxes. Your diligent documentation now could be the difference between a smooth tax filing experience and a stressful one. So let’s get to it, shall we?

Don’t be shy, send them over posthaste! Your CPA is waiting with bated breath for this accounting banquet. Remember the IRS has a knack for finding missing forms, so let’s beat them at their own game. Incline is here to help you every step of the way. So, polish off that magnifying glass and start rifling through your paperwork. Your end-of-year bookkeeping is a sprint to the finish line and you’re almost there!

It’s tax season, and you know what that means… lots of businesses are scrambling to get their paperwork together to avoid any unwanted attention from the IRS. We’ve all heard the term “contract labor,” but what does that mean, and how does it differ from an employee? Don’t fret, my small business owners – I’m here to break it down for you in a way that’s actually kind of fun (I know, controversial statement when we’re talking about taxes). Grab a cup of coffee (or a stiff drink), and let’s dive in.

The first thing you need to know is that the employee vs. contractor classification is based on several factors, not just one. Here are a few questions you should ask yourself to determine whether your worker is an employee or a contractor:

Who controls the work?

If you have the right to control the worker’s actions on the job (when, where, and how they perform their duties), they’re likely an employee. If the worker determines those aspects, they’re more likely a contractor.

Who provides the tools?

If you provide the workers with the necessary tools and equipment to perform their job, they’re probably an employee. Contractors usually provide their own tools.

Is there an ongoing relationship?

If the worker is hired for a set period of time or project, they’re more likely a contractor. If there’s an expectation that their employment will continue indefinitely, they’re probably an employee.

Overall, the more control you have over when, where, and how the work is performed, the more likely the worker is an employee. If the worker has more control and autonomy, they’re usually a contractor.

Now, let’s talk about why this distinction is so important. When you hire employees, you must withhold certain taxes from their paychecks (like Social Security and Medicare) and pay the employer portion of those taxes. You’re also responsible for paying unemployment insurance and worker’s compensation insurance. When you hire contractors, you don’t have to withhold taxes or pay insurance – the contractor is responsible for those things.

However, just because you call someone a contractor doesn’t mean they actually are one in the eyes of the IRS. The consequences of incorrectly classifying workers can be severe – you could be on the hook for back taxes, penalties, and interest. So, always make sure you’re following the rules!

Another important factor to consider is how much control you have over the worker’s rate of pay. If you negotiate a rate with an independent contractor and don’t try to dictate what they charge, you’re likely in the clear. However, if you set a specific hourly wage or salary for a worker, they’re probably an employee.

One final thing to note: some workers are considered “statutory employees,” which means they’re treated like employees for tax purposes even if you consider them contractors. Examples of statutory employees include drivers and delivery personnel who work for you using their vehicles, as well as certain kinds of home-based workers. It’s important to know the rules for each type of worker to make sure you’re in compliance with the law.

Phew, that was a lot of information! The bottom line is this: determining whether someone is a contractor or an employee isn’t always clear-cut. It’s important to consider all the factors and make a well-informed decision. If you’re unsure, consult with a tax professional who can help guide you through the process. Remember, getting this right can save you a lot of headaches (and money) in the long run. Happy tax season!

Tag: tax season

Preparing Bookkeeping for the End of Year: A Guide