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There are lots of things that can be done now to make the first months of 2013 easier. Here is a list of actions items:
1. Collect W-9s
Most people know they have to give independent contactors a 1099. Here are some other expenses eligible for a 1099: Interest paid on loans, rent, and household employees. A W-9 should be collected before paying these expenses. You need the W-9 data on hand to create 1099s. If you have not collected W-9s before payment was made, make sure you collect them before year end.
Send out requests for a completed W-9 to all vendors who are subject to 1099 rules. Remember to include a deadline in your request, such as 1 week from date of request, to ensure you collect all your W-9s before 1099s are due. If you send requests via snail mail, you may want to include a self addressed stamped envelope to encourage quick replies.
More info on Independent Contractors
More information on Household Employees
2. Catch up your books
You or your bookkeeper will need to have up to date 2012 information to ensure 1099s can be mailed by 1/31/13. It is also good to ensure your bookkeeping is up to date to make tax prep easier.
Busy season is here. If you have outsourced your bookkeeping, ensure you coordinate with your bookkeeper. Commit to a date, early in January, that you will provide the last of 2012 information. This will ensure your bookkeeper has time slotted to complete your books.
For personal taxes, ensure you have a folder/envelope/shoe box created to collect things like medical expenses, donations, and mortgage information.
3. Consult with your CPA/CTP
CPAs and Certified Tax Preparers get busy in January. If you want to review your tax situation, make an appointment in December. Your CPA or CTP will have more time to focus on your needs if you meet early.
4. Clean up QuickBooks
So many folks are on vacation in December, there is usually spare time. Take advantage of this time to clean up your QuickBooks file. Make Customers and Vendors inactive if they have not been used in a specific period of time, say 1 year. Review your Chart of Accounts usage and make accounts inactive that have not been used in a couple of years.
5. Files for 2013
Make your electronic and paper files for 2013 in December so everything has a landing place on January 1. File/storage systems should always incorporate an archiving plan. This means having things grouped by date so you can shred/purge older items per your archiving schedule.
6. Payroll Changes
Whether its changing payroll providers or asking employees to fill out new W-4s, now is the time to prep for payroll 2013. Collect all the data you need and make changes to employee or company set up as soon as the last payroll in 2012 is completed.