When Does the Tax Year Start and End?
The IRS defines a “tax year” as an annual accounting period for keeping records and reporting income and expenses. There are two types of tax years you can use to determine the end of the tax year:
- Calendar year: 12 consecutive months beginning January 1 and ending December 31
- Fiscal year: 12 consecutive months ending on the last day of any month except December
End-of-Year Business Checklist
Stay on top of your business as you close out your tax year, whether it’s based on a calendar year or fiscal year. Use this handy checklist to organize and prepare for the coming year.
- Organize your financial records. Having your books in excellent order will be an advantage for the new year.
- With the help of your accountant or CPA, conduct an audit, review or compilation – whichever financial report is most appropriate for your business. Determine your financial status after examining your balance, cash flow management, accounts receivable and income statements.
- Evaluate your current tax strategy. Is your current business structure the best plan for your tax strategy? Decide what to change for next year’s small business tax plan.
- Create a new business plan, reflecting off the end of year reports for your small business. Set fresh goals based off of this past year’s achievements.
- Review your client and vendor list, and make sure all the contact and profile information is correct. Additionally, update records for current and past employees in your payroll system.
- Prepare payroll records at the local, state and federal levels. Your accountant or CPA can help ensure that you comply with all payroll regulations. Decide if you will give a year-end bonus to your employees. Just like regular pay, employee bonuses are subject to income tax withholding.
- Start preparing your tax documents. Will you need to request an extended filing deadline? Confirm your deadlines based on your business’ structure. You can find which end of year tax forms for small business you’ll need from the IRS.
Need Help Completing Your End of Year Small Business Checklist?
If you need help organizing your books, finalizing your payroll records or preparing your tax documents, contact Watson CPA today. Small business owners in Carmel, Westfield and the greater Indianapolis area can request a free consultation to successfully close out this tax year and plan for 2019. Call 317-848-9938 now to get started!