End-of-Year Accounting Tips for Small Business
Streamline your 1099’s
In 2012 changes were made regarding 1099 reporting. The amount of paperwork increased as did the penalties for not complying with new government regulations creating an arduous (and if done incorrectly) costly process. Employ a cloud-based accounting system that has 1099 capabilities and integrates with Track1099 (a vendor portal where vendors can log in and retrieve their 1099s and directly e-file to the IRS). And because it’s cloud-based filing can happen anytime, anywhere on any device — directly diminishing the cost and workload for small business owners/businesses-of-one, and accounting professionals.
Know Your Nexus
Be sure your small business is filing in all required states where the business nexus* has been established. With state coffers on the look-out for additional tax revenue, many states have changed their nexus rules from a location/brick-and-mortar concept, to a framework where the nexus can be established simply by generating revenues from sales in a certain state (think of revenue from e-commerce).
Healthy, Wealthy and Wise
Take advantage of the small business health care credit. According to Jim Wilkinson at The Braver Group, if you are a small business who employs 25 full-time workers, pay an average wage of less than $50,000 a year, and pay at least half of employee health insurance premiums, then you are eligible for a maximum credit of 35 percent and 25 percent for tax exempt businesses (non-profits, charities).
Veterans Save Non-Profits (money)
For not-for-profit organizations who hire veterans who begin work on or after November 22, 2012, but before January 1, 2013 there is a tax credit available up to $6,240 per worker. The credit claimed will be reported on a new form as a credit against the NPOs share of social security tax for all employees. For more information visit www.irs.gov and search for the Work Opportunity Tax Credit.
* A nexus in general means a connection. The term nexus is used in tax law to describe a situation in which a business has a "nexus" or presence in a state and is thus subject to state income taxes and to sales taxes for sales within that state.
Source: Xero accounting software's Partner Advisory Council