Sunday, January 15, 2012

Year End Checklist

1. Get together all of your receipts. Organize them by type of expense - feed and grain, farrier, etc. Compare them against your checking and credit card accounts to make sure that you haven't missed any deductible expenses.
2. Balance your checkbook. There might be checks or deposits that cleared the bank that you have omitted from your checkbook.
3. Are there any customers that owe you money at year end? How old are the balances? Are they still collectible? Contact the customer and remind them of any overdue balances. Negotiate for partial or periodic payments if possible.
4. If you purchased anything using a loan, be sure to include the basic loan information in the documents you give to your tax preparer.
5. Are there any bills that you owe that aren't recorded?
6. When you have your preliminary financials ready, compare them to 2010 for reasonableness. Do they make sense, knowing what you know about your business?
7. Have there been any major changes to your life in 2011 - gotten married, had a baby, lost a job? Will there be any major changes for you in 2012? Be sure to share that information with your tax preparer.
8. Make a list now of topics that you want to discuss when you speak with your tax preparer - retirement planning, funds for your child's education, paying off your mortgage, etc.

Preparing your return is something you have to have done every year. Use it as an opportunity to know and grow your business. During the year, you are "in the trenches" day after day. But getting ready for your tax return gives you a chance to step back and give your business a more objective, global examination. Maybe you'll need to make changes, maybe things are great as is. But by taking a long, hard look, you'll know.