The first rule of running a business is to keep your personal and business finances completely separate from each other. Your business is a distinctly…
In this article, we’ll cover non-payroll issues to be aware of as you navigate year-end.
There’s a veritable alphabet soup of Forms 1099, so it’s important to use the right form for the right reason. Here’s the list in alphabetical order (click on each one for the specific instructions):
- 1099-B, Proceeds from Broker or Barter Exchange Transactions
- 1099-DIV, Dividends and Distributions
- 1099-INT, Interest Income
- 1099-MISC, Miscellaneous Information (used to be “Miscellaneous Income”)
- 1099-NEC, Nonemployee Compensation (as of 2020, if you make payments to non-employees, those payments are no longer reported on Form 1099-MISC, but on the new Form 1099-NEC)
- 1099-R, Distributions from Pensions, Annuities, Retirement or Profit Sharing Plans, IRAs, Insurance Contracts, etc.
Regardless of which 1099 form you use, they’re all due Tuesday, January 31, 2023 for payments made during 2022. You can find general instructions for 2022 Forms 1099 on the IRS website by clicking here.
If you have more than 250 Forms 1099, they must be submitted electronically.
Now is the time to make sure you have all vendor information such as correct name, address, and FEIN. You should have a Form W-9 on file for each vendor so you’re not overwhelmed at the last minute.
Prepare for filing Forms W-2
Now is the time to verify or update employee information like names, addresses and Social Security numbers. Be aware that automatic extensions of time to file Forms W-2 are not available. The IRS will only grant extensions for very specific reasons. Details can be found on the instructions for Form 8809, Application for Time to File Information Returns.
Reporting unclaimed property
Businesses must report unclaimed property to the state each year. Unclaimed property may include (but is not limited to) such items as dormant savings and checking accounts, uncashed payroll checks, vendor checks, security deposits, refunds, customer/patient overpayments, accounts receivable credit balances and insurance proceeds. More information about unclaimed property rules for both Kansas and Missouri companies can be found by clicking here.
Changes to entities, officers, or directors
Please let us know when you form a new entity, have changes to your current entity structure, or make changes to officers, board of directors or ownership. These changes can impact your income tax returns and payroll reporting.
If you’re a cash basis company
Please notify us of fixed assets placed in service on or before December 31 (whether or not the item has been paid for). Also, be aware that Employer FICA expense must be PAID by December 31 to claim a current year deduction. And if you pay expenditures for your company using a company credit card prior to December 31, please provide us with this information.