| The end of the year is approaching. What information | | | | If your business has inventory, a physical inventory |
| do I need to provide to my accountant to close out the | | | | must be supplied to your accountant as of December |
| year? | | | | 31, 2006 for calendar year tax payers. You should |
| Some items that need to be handled prior to the end | | | | report this information to your accountant with your |
| of the calendar year are: | | | | company's December tax information. |
| Taxable Fringe Benefits: | | | | Closing out Payroll: |
| These are items that would need to be included on | | | | The end of the year is the time to instruct your payroll |
| form W-2. | | | | company on the following items: |
| 1. Personal use of company owned or leased vehicles. | | | | 1. Holiday Bonuses. |
| The Internal Revenue Service requires that employers | | | | Make your expectations clear to your provider. Do you |
| keep adequate records of the personal andbusiness | | | | want to stop direct deposit and hand outphysical |
| use of company vehicles. These records must be | | | | checks? What is the Federal Withholding amount that |
| kept for virtually all cars and light trucksincluding leased | | | | you would like to use? Should 401 (k)be deducted from |
| vehicles. | | | | these bonuses? Etc. |
| 2. Medical insurance premiums for S corporation's | | | | 2. Fringe Benefits. |
| "share-holder employees". | | | | All fringe benefits need to be reported to your payroll |
| 3. Tuition reimbursements. | | | | provider prior to your company's last payrollof the |
| Tuition paid for an employee in excess of $5, 250 per | | | | year. |
| year must be included on form W-2 as income. | | | | 3. Vacation and Sick Accruals. |
| 4. Life Insurance premiums. | | | | How will your company handle vacation and sick |
| Life insurance premiums on group term life insurance | | | | accruals? Should they be paid out at the end of |
| over $50, 000 must be included on form W-2as | | | | theyear? Or should the balance be carried forward to |
| income. | | | | the next calendar year? |
| 5. Dependant Care benefits. | | | | 4. Third Party Sick Pay. |
| Dependant Care benefits paid for or to employees are | | | | This is disability payments made to employees |
| reported on form W-2 but are not included inthe | | | | throughout the year. Your company should reportboth |
| taxable income. | | | | short term and long term disability to your payroll |
| 1099 Information: | | | | provider as this information is required to beincluded on |
| The Internal Revenue Service requires that you issue | | | | form W-2. |
| 1099s to individuals and unincorporated businesses to | | | | This list of what to remember is a sampling of the |
| whom you have paid $600 or more for services or | | | | items a company needs to prepare for the end of a |
| rent, $10 or more for interest or dividends, and all fees | | | | calendar year. You should check with your accountant |
| paid to attorneys whether individual firms, or | | | | to see what items affect your business so that the |
| corporations. | | | | end of the year runs smoothly for your company. |
| Inventory: | | | | Have a happy and safe holiday season. |