With less than two weeks left in the year we thought you might find it useful to receive a reminder of some important end of year considerations for your company. While not all of them will be relevant for your particular business, most should be considered nonetheless.
1. 1099 Requirements
- The first issue to consider is whether or not your company is required to prepare 1099 Forms for vendors that you have paid in 2013. Please refer to the general requirements for Form 1099/1096 reporting
to determine the circumstances under which your company would need to file these reports. We also want to provide you with access to the IRS web site, where you can access the 2013 Form 1099, and instructions, as well as the related W-9 form. Links to these forms like this are available on our website
2. Annual Meeting
- If your company is incorporated (either C or S corporation) the officers and shareholders are required to hold at least one annual meeting, in order to determine matters that are essential to the management and operations of the company. Please refer to your company's articles of incorporation and bylaws, or consult with your company's attorney to determine the annual meeting requirements for your company. Limited Liability Companies (LLC's) are not required to hold annual meetings, however this practice is highly recommended to clarify company policies, and make changes in operational matters. You may review some examples
of topics to be considered for your company's annual meeting, in order to provide you with some guidance with respect to relevant issues.
3. Record Retention
- The minimum required period for retaining financial records is 3 years, which is the standard statute of limitations look back period, which the IRS and other tax authorities enforce. However, our office recommends a 7 year archiving of relevant tax and accounting supporting information, in order to make certain that any prior year issue can be resolved, with the proper factual financial and employment data. Please refer to our record retention guidelines
4. Re-seller's Permit - Remember that effective January 1, 2010, the resale certificate was replaced with a re-seller's permit, issued by the Department of Revenue. The re-seller permit can be applied for with the Department of Revenue, in order to allow your business to make wholesale purchases, including qualified contractors. The permits allow businesses to purchase items or services for resale, without paying retail sales taxes. However if your purchases are subject to sales taxes, typically for items used by your company, but were not paid at source, remember that you are required to pay use taxes, at the time you file your combined excise tax report with the State of WA's Department of Revenue.
5. Employee Retirement Benefits - If you haven't already, remember to consider establishing an employee benefit type of plan, in which the employees, as well as the owners/officers of the company can all receive benefits. You may want to consider establishing a retirement type of plan, such as a SIMPLE IRA plan, which allows employees to defer a portion of their wages, along with a relatively modest company match, as a means to deferring taxable income of the employee as well as allowing a deductible, non-payroll taxable form of compensating your employees. This is one of many retirement plan options your company can consider adding, and we can certainly discuss all of the options with you, if you are interested.
6. Health Savings Plan - If your medical insurance premiums have risen significantly, a health saving account (HSA) plan can be beneficial to employees and the company when combined with a lower cost "high deductible" type of medical insurance plan. It allows the employees of the company, as well as the company, at the discretion of the ownership, to contribute toward a medical savings account, which can be either used by the employee during the year of contribution, or carried over indefinitely for future medical costs, and/or eventually as a retirement type of fund, similar to an IRA.
7. Medical Insurance Premiums - If your business is an S corporation, remember that the medical insurance premiums paid out on behalf of the shareholders must be reported along with wages on Form W-2. The premiums can still be paid out by the S corporation, on behalf of the shareholders, however the total premiums must be included on Line 1, as part of the "Wages, tips, other compensation" total, and also should be reported on Line 14, as a separately reported line item, so that the nature and amount of the payments is clearly stated. Note that this reporting requirement, as per IRS Notice 2008-1, does not change the fact that these medical insurance premiums are deductible by the shareholder/taxpayer when paid.
8. Written Consent for Copies of Tax Returns
- Remember that federal law requires that in order to directly provide 3rd party users (e.g. bankers, insurance agents, etc) with a copy of your tax return, or with information from your tax return, we must obtain written consent from you prior to the release of this information. Link to the form here
9. Affordable Care Act - Given the implementation of the ACA (Affordable Care Act), we understand that as a company owner, you, as well as your employees, may have specific concerns or questions regarding various compliance aspects of the law. Please contact us if you'd like to discuss how the changes are impacting you and your company.
10. We are here to help! As the year winds down and you complete your company's accounting procedures, such as the counting of your company's year end inventory, and the reconciling of your company's annual accounting, please let us know if you have any specific questions and/or concerns that we can assist you with.