notebook 2010 Year-End Financial Checklist A
s the end of the year approaches, it is time to address important tax and financial planning issues, advises Nikki Quenette, CPA, CMA. Quenette, a Fargo, N.D.-based veterinary financial and business manage-
ment consultant, suggests the following: November/December:
Meet with your tax advisor for tax planning. Most transactions affecting the current tax year must be completed prior to December 31. If you wait until your tax return is completed, it will likely be too late to change your 2010 taxes (there are some exceptions, such as retirement contributions).
Conduct a strategic planning session to set goals for 2011. Revenue goals Profit goals Growth goals Team goals
Create a marketing plan for 2011. What strategies are you going to use? What will the budget be for each strategy? How will you track your return on investment? Create a budget for 2011.
In addition to budgeting revenues and expenses, remember to budget for the owner’s return on investment and capital expenditures (e.g., large equipment purchases, new facility, facility remodel).
January: Complete W-2 and W-3 forms.
Complete 1099 forms. Complete fourth-quarter and annual payroll tax forms. Complete fourth-quarter sales tax forms.
If bookkeeping is performed in-house, reconcile all accounts to prepare for completing tax returns.
Trends magazine, November/December 2010 Know your tax breaks
Deduct costs of equipment: Section 179 allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. The maximum deduction allowed in 2010 is $250,000, subject to a phaseout if a business has capital expenditures exceeding $800,000.
Credit for paying employees’ health care: The Patient Protection and Affordable Care Act gives a tax credit to certain small employers and tax- exempt organizations that provide health care coverage to their employees. To qualify, an employer must: a. have fewer than 25 full-time equivalent employees, whose wages are less than $50,000 per year.
b. cover at least half of the cost of the health care premium for some work- ers based on the single-person rate. Maximum and phaseout rules apply.
Two breaks for hiring the unemployed: The Hiring Incentives to Restore Employment Act provides two new tax benefits to employers who hire certain previously unemployed workers. Employers who take advantage of both can save more than 12%, or 1/8, of a new employee’s wages. These benefits include: • Social Security tax exemption: Employers are exempt from paying their portion of the Social Security tax on wages paid to qualifying employees. This amounts to 6.2% of each qualifying employee’s wage.
• New hire retention tax credit: There is a tax credit for 6.2% of wages paid to a qualified employee retained for a minimum of 52 consecutive weeks. The maximum credit that can be claimed by an employer in such a case is $1,000.
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