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Remember to Accrue Revenue and Expenses In QuickBooks at Year-End
Accrual based businesses typically need to make some adjustments before closing their books at year-end. Different businesses make different decisions regarding exactly what to accrue, but whenever an expense is incurred in one year for which the benefit won't be received until the next year, or revenue is received in one year for products or services that won't be delivered until the next year, then it is worth considing whether or not to make an accrual adjustment.
Time to Issue 1099s for CY2008
People often think of 1099s as being essentially a W-2 for independent contractors. While it is true that 1099s are the forms given to independent contractors showing the income they earned during the year, 1099s are also used for many other things. For a list of the types of payments for which 1099s are necessary, see Time to Issue 1099s.
QuickBooks Tutorials: Statements, Customer Register, Handling Independent Contractors
We recently added a number of QuickBooks tutorials related to using statements in QuickBooks, using the customer register and handling independent contractors. Samarak's QuickBooks tutorials include detailed instructions and screen shots so you can see exactly what we are talking about.
Independent Contractors Earning Less Than $600
Businesses and individuals that pay an independent contractor $600 or more are required to provide that independent contractor with a FORM 1099-MISC reporting the income paid. They are not, however, required to provide a FORM 1099-MISC when they pay the independent contractor less than $600. Because of this, many independent contractors falsely assume that this income is not reportable.
IRS Toll-Free Numbers and Hotlines
The IRS has many different toll-free numbers and hotlines to help you during the filing season and beyond. Use the chart below to figure out which IRS phone number you should call as starting in the right department is sure to save you time.
Reduce Taxable Income By Writing off Bad Debt
Remember to write off your bad debt at year end as a means of reducing your taxable income. I recommend going through all open invoices annually in January to see if there are any you don't expect to be paid on. Simply run an Accounts Receivable Aging Detail report (in QuickBooks, select Customers & Receivables from the Reports menu, and then select A/R Aging Detail) and look at all old invoices.
