The Early Bird Finds Success
Much of the world uses the Gregorian Calendar which begins on January 1 and ends on December 31st each year. A Gregorian year (apart from Leap Year) is 365 days in length, has 525,600 minutes, 8,760 hours, 52 weeks, and is divided into four quarters. As of September 2019, it is the last month of the third quarter with less than 120 days until the New Year! That’s 120 days to finish the year strong and here’s what to do about it.
While it may be hard to believe that the fourth quarter is almost here, its always a good idea to get an early start on tidying up accounting information. Businesses that follow a calendar year need to get financials in order before year-end, in preparation for tax filing and form submission.
One way to do this is to review and start preparing all payroll records for local, state, and federal tax obligations. Federal Labor Laws affect workplace pay practices in almost all businesses with employees including minimum wage, overtime pay, and 1099 contractor rules. Having your bookkeeper review payroll records, make necessary adjustments, and correct data entry errors where needed now, rather than later, will reinforce employer compliance before it gets too late.
For companies with 1099 independent contractors, employers need to adhere to some detailed guidelines. An independent contractor is self-employed, and employers enter into a contract with them to complete a specific task. Independent contractors set their own business hours, use their own tools, and may work for more than one business. Because they are self-employed, employers do not withhold payroll taxes from their paychecks as contractors pay their own taxes. Additional information on what the IRS considers an independent contractor can be found here.
Any company engaged in business where more than $600 dollars was paid in one year to a contractor for services rendered, a 1099-MISC tax form is required. The company is required to report the payments on their IRS tax return, while a 1099-MISC is necessary for contractors to report income and pay their own employment taxes. Since they work intermittently, months may go by before seeing them again or their work may be complete. Instead of waiting until later in the year, now is the best time to review all contractor contact information and mailing addresses, make the necessary corrections, and update your contacts database. Doing so now will help smooth out the 1099 delivery process prior to the January 31st deadline.
As the old saying goes, “the early bird gets the worm”; whoever arrives first has the best chance of success. Let’s get ready for success!
By Susan Amsler
September 12, 2019
Randolph Business Resources, LLC.
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