Start Your 2016 New Year Accounting Right With These 5 Steps

It’s a New Year and a great time to look back and measure the various successes and setbacks experienced in the past year, and then plan ahead your strategy for success in 2016. There are also a number of important accounting tasks to complete this month. Do yourself a favor and get them done now for your own piece of mind using this 2016 new year accounting guide. Plus, some carry a hefty fine if overlooked.

2016 New Year Accounting Steps:

1. Review Inventory

Review your current inventory and note the value of items not sold in the prior year. Most businesses will use this for the Schedule C, Profit or Loss From Business on their taxes.

2. Collect Year-End Statements

Gather up and organize all your 2015 year-end statements and accounting reports. Keeping an electronic and hard copy of your 2015 balance sheet and profit and loss statement is a good start. Consult your accountant or check your accounting software options for additional year-end reports you will want to keep a record of.

3. Reconcile Accounts

Go through your business credit and banking accounts and make sure you haven’t been overcharged or undercharged (only to have to pay later). Look into any discrepancies and make necessary corrections so you can start the new year off right.

4. Complete IRS Forms 1096, 1099-MISC, and Payroll Forms (i.e. W-2s)

The IRS deadline for mailing employees W-2s and independent contractors 1099s is January 31, 2016. This is important since your employees are likely expecting a return and would like to file quickly. Plus, you could be charged a $250 IRS fine for each late employee form if you disregard this filing date. Also, don’t forget you as a business owner need to file form 1096 with the IRS and it must be mailed by February 28, 2016. Get it done sooner rather than later for your own piece of mind.

5. Depreciation

According to the IRS, the depreciation definition is “… an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property” (see here for a complete definition). It is important to know what depreciable assets are and what are not. Go here to check the IRS depreciation test to determine your depreciable assets. Keeping an accurate account of all qualifying items means you will not miss out on this important tax deduction come tax time.

Need some help with your business accounting? By outsourcing your bookkeeping and accounting services, you will not only increase your revenue, you will also gain the freedom to concentrate on other areas – like generating new customers and growing your business. To learn more about how we can help your business thrive, call us at 727.828.9945 for more information.

About Accounting & Business Partners

Accounting & Business Partners is a CPA firm with an accurate, consistent and timely bookkeeping, payroll and tax departments. We believe that success lies in numbers. However, the drive behind the numbers is what truly matters. That’s why we look beyond the financial statements.

Accounting & Business Partners Team