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7 Tips to Help Small Business Owners Avoid Costly Tax Errors

It's nearing the end of 2013, and for small business owners, it can be the busiest and most stressful time of the past 12 months. A checklist seems to have been created for just about everything. One that small business owners will want to be sure not to overlook is a Year-End Tax Preparation Checklist.

1. Confirm the accuracy of all W...-2s. This is critical. Make sure to account for all wages, verify employer and employee data and social security numbers and account for any terminated employees. On W-2s even the most simple typo can cause a rejection resulting in penalties and fines.

2. Confirm that Year-to-Date reports reflect the accurate deferred compensation plan type and verify employee contribution amounts.

3. Ensure contributions to any type of retirement plans, including 401(k) and 403(b) do not exceed maximum amounts.

4. Verify that FUTA deposits have been made and whether any credits apply.

5. Verify all independent contractor payments have been properly accounted for on the 1099 MISC.

6. Maximize Reimbursement Expenses: Ensure eligible expenses to be deducted are properly entered into the business accounting system.

7. Hiring a qualified veteran before Dec. 31, 2013 could qualify your business for the Work Opportunity Tax Credit. The maximum tax credit available varies; for more details on the WOTC tax credit visit the IRS WOTC tax credit page.

A bonus tip for 2014: Get ready for next year's payroll taxes. Verify the employer state unemployment insurance tax rate, taxable wage limit and deposit frequencies for each state for next year -- they could change so business owners need to look for any tax notices to that effect.

Call David M. Green Bookkeeping and Tax Service we now have 2 enrolled agents to help any individuals and small businesses with any tax services.

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