Easy, actionable advice for your biz tax prep!
As year end approaches, the stress of year end tax prep awaits. For many, January is known as a month of new beginnings, but for business owners it can bring feelings of dread. For some, business receipts have piled up, bank accounts haven’t been reconciled in months, inventory isn’t completed - it’s overwhelming! Regardless of your business size, trying to manage the day-to-day operations, coupled with the start of the year can keep you from doing the business work you love. So here are 5 easy steps you can take today to make things easier at year end!
STEP 1- Setting it up
Create a folder in your File Organizing System (I use Google Drive) and naming it “2017 Tax Prep.”
STEP 2- Creating your vendor list
Pull your business’ vendor list. This list would contain anyone your business has paid for services.
If you paid businesses or individuals for goods or materials, you DO NOT need to include them in the review.
Vendors that SHOULD be included are: attorney, bookkeeper, CPA, landlord, business coach.
If you are using bookkeeping software, like Xero, pulling a vendor list is pretty straight forward, just click on the Contact Tab, click on Suppliers and export the list in Excel.
However, if you don’t have bookkeeping software, start creating a list of your business vendors in Excel.
These are the data fields you need in your spreadsheet:
- Business Name
- Business Contact
- City, State, Zip
- Phone number
- Web site address
- Tax ID Numbers (TIN or SSN)
- Email Request Sent (Y/N)*
- W-9 Form Received (Y/N)*
- Follow-up Email Sent (Y/N)* (Only necessary if you haven't received their form)*
*No matter how you extract/create the spreadsheet, you will need to manually add these fields to your spreadsheet. Be sure to save your Excel file in your 2017 Tax Prep Folder!
STEP 3- Sorting the information
Now, you pulled the list or created the Excel file, confirm you have the following key pieces of information:
- Tax ID Numbers (EIN or SSN)
- Mailing address
- Email address
- Phone Number
You need to collect this information for anyone that does not have this information. Any vendor with updated information can be removed from your list.
STEP 4- Collecting the information
Now, let’s collect the information. Draft an email requesting the vendor complete an IRS W-9 Form. Visit the IRS to download the form!
To make your life easier, download my sample email– from there, you can copy and paste and make any adjustments you need!
After sending your request emails to vendors–
As forms are returned, update your spreadsheet and if you use a bookkeeping software, add the TIN or SSN to their vendor record. By doing so, when you complete this next year, you already have that information on file.
Now that you made that initial request, update your “Email Request Sent (Y/N)*” on your spreadsheet. And as W-9 Forms are returned, update your spreadsheet “W-9 Form Received (Y/N)*”
After 3 weeks, if you haven’t received the form, send a friendly reminder email. It can be the same email you sent originally, only with an updated note requesting an immediate response. Once you send that follow-up email, be sure to update your spreadsheet.
STEP 5- Voila!
Ok, your tax prep work is done! Now enjoy the holidays! BTW, your bookkeeper and CPA will thank you for your hard work!
I hope this helps alleviate some year end tax stress. Be sure to subscribe to the newsletter below to get advice on how to make your business bookkeeping easier and get a bonus download, "Five Money Managing Apps to Transform your Business"!
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Thanks for reading. Please keep in mind that The Wellness Bookkeeper, LLC and the information contained herein is not intended to be a source of advice with respect to the material presented, and the information and/or documents contained in this website do not constitute legal advice and is not be held liable.