As if things weren’t already crazy enough with holiday shopping right now, there’s the year end close and taxes to sort out, aah! But don’t fret, it doesn’t have to be stressful if you stay organized and utilize my year end checklist for businesses and taxes. Once you can see a laid out list of things you have to work on before December 31st, you can start preparing now and won’t be caught by surprise right before the New Year.
And if you’re an entrepreneur with no employees, not everything on this list applies to you (yay!) so you have less to do for once. Even if you don’t own your own business, it’s helpful to take a look through this list to make sure you have everything in order for your employer and benefits. For those of you with employees however, be sure you don’t dawdle especially since a lot of people in your team could be taking off soon for the holidays. Make these last few business days count and then you can really relax and celebrate the New Year.
Year End Checklist For Businesses & Taxes
- W2s, W4s Check that all W2, and W4 info on file for your employees is correct and up to date, especially social security numbers, addresses, and filing status
- W9s Make sure to collect W9s from any contractors you’ve paid this year. You will use the info on those forms in January when you prepare and file 1099s for individuals who have earned over $600. I suggest filing electronically – it’s way easier than having to order and wait for the special paper forms from the IRS.
- Bonuses Determine if, when, and how much you will pay in year end bonuses and prep payroll.
- Accruals Review all of your paid wages including overtime to check for any errors or unpaid balances, and check the accruals and carry over amounts for sick leave and vacation time for all employees.
- Tax rates Double check that unemployment, disability, state, federal, social security and medicare withholding rates are correct in your payroll system for the closing period and upcoming year.
- Status Confirm you have the latest employee status for your entire office including terminated employee data.
- 401k Remind eligible employees they can submit their last contributions ($17,500 for 2013, or $23,000 for those over 50). If you’re a freelancer or entrepreneur, you have until the end of the year to enroll yourself in a self-employed 401k plan.
- SEP IRA Another easy retirement plan option for entrepreneurs and self employed individuals is the SEP IRA. (Read What Is A SEP-IRA). As an employer you need to determine the benefit percentage between 0-25% you will pay out to your eligible employees.
- Enrollment Make sure you’ve collected all the open enrollment forms from your employees and have confirmed payroll is setup and ready to go for Jan 1.
- Flex spending rollover Finally the government has allowed up to $500 of unused flex spending account balances to be rolled into the next year. Chances are your provider requires you to activate this new feature for your employees so don’t delay! I’m thrilled about this new benefit because now we don’t have to worry about losing unused funds, especially since they got rid of the OTC meds benefit a few years back which is how I used to finish off any year end balances.
- Holiday party You may have already held your holiday party, but if not hopefully you have something planned. If you’re way behind, you can at least throw together a last minute shindig at your house or in the break room.
- Cards It’s always a nice show of thanks to send your clients holiday cards this time of year. Happy New Years cards are a good backup plan if you’re way behind schedule.
- Promotions & Raises If you have good employees, make sure you’re doing your part to reward them with compensation raises and promotions if you have the means.
- Coverage With Christmas and New Years almost here, it’s time to double check your coverage and make sure that your employees are fully trained on their backup work and everyone knows who is covering who on which dates.
- Inventory Check up on your product inventory and also your office supplies while you’re at it. Update your accounting system if needed and place orders to restock if you’re running low.
- Progress Report A lot can happen in a year and you should report it back to your employees. Even if you think they are already aware of the accomplishments and hiccups too, chances are they aren’t in the loop on everything. Employees like transparency and knowing the company’s state of affairs.
- Goals A lot of times this year we are so focused on personal goals that we forget about career and corporate goals. Get a list together and work on action plans with your managers and employees.
- Calendar One of the questions that comes up a lot as New Years approaches is what’s the holiday calendar for next year? It’s time to put it together and send it out to everyone.
- Reimbursements Get to work on processing all of your employee expense reports from Q4 and cut them checks this month.
- Reports Run your latest profit and loss report and balance sheet and analyze your numbers. Perhaps you need to do a little extra spending before the year is up to raise your expenses or vise versa. Check out my list of business expenses too.
- Distributions If you are a shareholder of your own corporation, figure out if you have enough funds to take a distribution.
- Budgets Utilize the accounting reports you’ve run and start putting together a budget for next year.
- Finances Get your money in order with this year end checklist for financially wise people.
Other Taxes & Misc
- Estimated taxes It’s easy to forget that Q4 estimated taxes are coming up in mid January. Don’t forget to keep some money aside to file!
- Property taxes Every state has different deadlines for property taxes but a lot are due in December or in Q1. Make sure you have reminders in place for both your corporation or yourself if applicable.
- Donations Its the season of giving so if you’re giving out charitable contributions to eligible entities, be sure to get tax receipts!
- Tax tips Check out my Tax Tips for Entrepreneurs Part 1 and Part 2 and get in shape for your upcoming tax returns.
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Updated for 2016 and beyond
Great list to reference for year end. Thanks!
Paul @ The Frugal Toad says
Nice resource Sydney! Makes me glad we got rid of the small business a couple of years ago!
Chuck @ Tortoise Banker says
Killer article… I’ve bookmarked it to refer back to. It’s always nice having a checklist!
Poor Student says
Great list and reminders. This is such a busy time of year that it’s easy to forget about what is just around the corner!
Bryce @ Save and Conquer says
I have never run a small business, but the company I work for was a small business until it was bought out by a large business some years ago. I saw all the necessary work it took to run the small business. It looks like your list if pretty thorough and would help many small businesses at the end of the year.
Ahhh… the dreaded W9s! Hate em. Why I prefer not to contract out, or keep contracts to a minimum. Still better than hiring an employee though due to the extra taxes!
Yeah they aren’t fun to have to hunt down but at least they’re manageable in small numbers. It’s nice having fewer strings attached when hiring a contractor versus an employee, and yes saves on taxes.
I’m one of those guys who like to check things off lists! I do it all the time! Great resource here!
Thanks MC. I love the feeling of checking things off too! I purposely make my to do list with lots of little things so I can tackle them one bit at a time and get to cross more things off. 🙂