Business owners are facing heavier burdens every year when it comes to tax preparation. According to the NSBA Small Business Taxation Survey, businesses are spending more money and time preparing their taxes while staying in compliance with the Internal Revenue Code laid out by the IRS With the increasing complexity of tax laws, it's critical for businesses to start planning for and preparing their taxes as early as possible.
There are several key steps for businesses to take throughout the year. Just as employees fill out W-4s before starting work, contractors should fill out their own tax form, Form W-9, before performing any services for businesses. As the year draws to a close, these W-9s should be compared against records to ensure all data is complete and accurate. Similarly, employers should speak with employees to ensure their W-4s are up to date and the correct amounts are being withheld.
Once January hits, it's crunch time for businesses and tax preparers. Recipient copies of W-2s and most 1099s need to be mailed by January 31st!