As 2016 comes to an end, it’s time to start preparing your poultry business for tax season. April may be six months away, but having your finances in order will ensure a smooth transition into the new year. We advise meeting with your CPA or accountant before December 31st. During this time discuss any changes in your 2016 finances such as the purchase of new farm equipment or a change in your dependents.
We advise meeting with your CPA or accountant before December 31st.
Reflecting on your poultry farm’s financials will help you know whether you have any tax liabilities. It will also help your CPA or accountant understand where you stand with your poultry business.
From 1099 forms to retirement contributions, planning is key to a smooth tax year. Below is a checklist to better prepare your poultry farm’s financials for the upcoming tax season.
- Schedule an appointment with your CPA or accountant – This meeting should take place before December 31st to make sure your tax liability is on track. A meeting to discuss your financial health is critical and will ultimately help you and your poultry business thrive.
- W-9 – You need forms for all Contract Labor. The 2017 contract labor deadline (for those who receive a 1099) is 1/3/2017. All 1099’s must be mailed both to the recipient and the IRS by this date. You must verify that you have all required documentation on file so 1099’s can be printed and mailed on time. The fines and penalties for a late filing are up to $500.00.
- Workers Comp – You need files for each subcontractor who is required to have workers comp insurance.
- Cash Expenses – Categorize by the type of expense. Expenses can include meals, automobile payments and supplies. Remember to keep receipts when applicable and organize by month.
- Mileage – If you track mileage instead of actual expenses, make sure your mileage is written down or you have an app on your smartphone that easily tracks this expense. Please note the mileage rate changes yearly and is published in December. The mileage rate for 2016 is $0.54 (or 54 cents) per mile.
- Estimated Taxes – If you have made estimated tax payments, they should be recorded and filed together.
- Review of Assets – Have any of your assets been disposed of, sold or added? Now is the time to make a list and note any changes that occurred in 2016.
- Budget Review – Look at expenditures for the current year and begin to plan for next year.
- Life event changes – Report the birth of a child or death of a dependent or spouse to your CPA. It’s important to add these events to your taxes because they will cause changes to your records moving forward.
- Charitable donations – Most agencies will provide a statement of contributions for cash/check donations. If donations are non-cash items like clothes or assets, itsdeductible.com is a website that allows you to assign a value to items. This detailed report will be beneficial to your CPA.
- Retirement Contributions – Provide your CPA with any contributions you have made to your retirement fund.
Now is the time to make sure you have your assets on a depreciation schedule. Update your depreciation schedule throughout the year when business assets are purchased or sold. Once January rolls around, you will lose any expenses that needed to be purchased or deducted in 2016.
You may have overlooked expenses because you paid in cash or out of a personal bank account. On a monthly or bi-monthly basis, be sure to carve out time to record these expenses. These small ticket items may seem minimal, but when you spend $20.00 here and there, it adds up. Non-reported expenses equal lost deductions.
Being proactive during tax season will help your poultry business be financially successful throughout the year. It’s never too early to start thinking about how to manage your business and increase savings in 2017.