HIS CPA – Checklist for Year-End Taxes and Monthly Financials

It is certainly that time of year again. Please be reminded that corporate returns are due March 15. If we want to file by the due date, I will need to receive your data in next few weeks so that I will have an ample amount of time to file. As always, I will file for the automatic six-month extension in the event I do not get the data in time. Please be reminded that an extension to file is not an extension to pay and that both the IRS and the state expect you to pay your taxes as you earn the monies. Please be reminded there are no valid extensions after the September 15 final due date lapses. Please be sure to allow 10 days for me to complete your returns after I get all of the information needed.

To process your corporate return, please forward your balance sheet and your profit and loss and copies of any W-2’s the corporation might have issued. If you have not yet done so, please be reminded that 1099’s should be issued by the end of January; your payroll service will handle this if you get them the information. Before you send the current year’s financial please be sure to always review the prior year’s balance sheet on the tax return and ensure that your internal books equals the return while being sure to make any appropriate adjustments. That way you will be assured of starting the year off with a clean set of records which will otherwise distort you current year’s operating results.

If you business has an average salary of less than $50,000 (not counting owners, their family members and those not on your medical insurance plan), have less than 25 Full Time Equivalents (FTE’s) and provide over 50% of the insurance for all employees you may qualify for the Small Business Health Care Tax Credit. If you think you might qualify please forward the amount of net medical insurance premiums paid by employee (after deducting the amounts an employee paid) along with whether their medical coverage is Single or Family. To read more about the credit, click here. It would be advantageous to record the medical insurance premiums for employees versus owners in a separate P/L account.

Keeping your business legal in all states where your company transacts business is essential. There are several criteria to evaluate when considering where to originally incorporate/domicile your business. All the criteria should be looked at in aggregation to consider including where your business has its core business operations, employees and physical locations. To learn more read this article on our website.

To complete your corporate return, please forward:

  • Your year to date Balance sheet, Profit & loss
  • Year end Bank Statements and Bank reconciliations
  • Aged Accounts Receivable
  • Year-end Inventory
  • Aged Accounts Payable
  • Year to Date Payroll Records by Employee
  • Notes Receivable and Payable Balances at Year end
  • Copies of new Notes
  • The amount of medical insurance paid for each shareholder
  • If your company is new, please forward copies of the incorporation papers. Please be sure to advise of all states where your corporation is transacting business and to forward for the state returns the below information by state (sales, inventory, fixed assets, rent and payroll)

Before you send your Year-End Financial please be sure that:

  • The general ledger balance agrees to your checkbook and your bank reconciliation.
  • The Accounts Receivable balance agrees to your internal aging reports.
  • The Accounts Payable balance agrees to your internal aging reports.
  • You advise of any fixed assets that have been acquired or disposed of during the year.
  • That ALL of the balance sheet and profit and loss accounts are correct.
  • That you have only one retained earnings account.
  • That as of January 1st of the prior year that you closed the shareholder distributions account to retained earnings.
  • That the retained earnings account on your internal books equals or is reconcilable to the retained earnings to the last corporate tax return filed.

This is to confirm that you are aware are handling all of your payroll and independent contractor/1099 needs, of the need to have a business license, to pay the annual registration fee, to have your annual Board of Directors and Shareholders Meeting, and to file the county property tax report (please be sure to claim the Freeport Exemption on your inventory if you qualify as this can substantially reduce the amount owed).  Please note that if you have not yet set up a retirement plan or have a formal financial plan, that  I suggest that we sit down together soon to get the right plans in place to help ensure your long-term financial success!

This is to confirm that I suggest that you formally tax plan at least twice annually.

To process your personal income tax return, please forward:

  • Copies of all reported income forms, i.e. Forms W-2, 1099, brokerage statements, interest, dividends, normal or premature distributions from a 401K/Pension/IRA plan, Social Security etc.
  • Summary of all medical expenses with copies of all individual items over $1,000.
  • Summary of property taxes with copies of all individual items over $1,000.
  • Summary of Ad valorem Taxes (property tax on cars) with copies of all individual items over $1,000.
  • Summary of Mortgage Interest with copies of all individual items over $1,000.
  • Summary of cash and property contributions with copies of all individual items over $1,000.
  • Be sure to include any changes in address, dependents, filing status, or any other substantive changes from the prior year which would have impact on this year’s return.
  • Please forward student loan interest, child care expenses net of any dollars already reimbursed via a Dependent Care/Section 125 plan, tuition, and any other miscellaneous deductions/income.
  • Any dollars invested in a Georgia 529 Plan, dollars paid for Educator Expenses, or Other Tax Credits and Deductions.
  • If you are a new client to us please bring along for both corporate and personal a copy of your prior year tax returns. If a brand new corporation, please forward along a copy of your incorporation papers, Federal ID #, and your S Corporation acceptance.
  • If you have had any independent contractor/proprietorship income you have earned, whether you have received a Form 1099 or not, please use this form (PDF) (Excel) to recap all revenue and expenses.
  • All K-1s where you and an investment interest including an acknowledgment if you have sufficient basis to take the losses listed.
  • If you lived in multiple states during the year or had income allocable to different states please be sure to denote that information for the varying state returns.

The initial due date for personal returns is April 15. For returns not filed by that date both the IRS and GA allow for a six month extension. Please be reminded that there are no valid extensions after the October 18 final due date lapses. Please be reminded that an extension to file is not an extension to pay and that you are required by tax law to pay applicable taxes as the monies are earned or you will be subject to additional penalties and interest.

Please be reminded that the mileage rate for the first half of 2011 is 51 cents per mile. From July1 through December 31, 2011, the mileage rate is 55 cents per mile. For 2010, the mileage rate is 50 cents per mile. Please turn in an expense report monthly to get reimbursed for these and any other business expenses you might have paid personally. IRS tax rules require you to have a day by day log to support business miles. Please be reminded that extending the filing of a return does not delay the need to pay as you go as both the IRS & GA will bill you for penalties and interest if you do not pay your taxes during the tax year to which they relate.

I am looking to grow my business by adding key accounts like you with goals and aspirations just like yours.  So if you know anyone looking for a Good CPA, please let me know and to check me out at www.HISCPA.com.

Please be sure to allow 10 days for me to complete your returns after I get all of the information needed.

How Do I Do Payroll Tax Withholdings for My Business? Gwinnett Christian CPA Firm Advises on IRS and Georgia Unemployment Tax Issues

“Payroll tax returns and their attendant issues are the bane of many business owners both big and small.  Tax law at federal, state and local levels often leaves an entrepreneur feeling both dazed and confused.  There is no greater area of need for tax simplification than in the area of payroll tax issues.  Payroll tax returns and payments are due to the varying regulatory agencies at differing times, unique and special forms and often what appears to be conflicting reporting styles and forms.  Unfortunately, this is just the tip of the confusion to which you will help find clarification below.
— Gwinnett CPA, John Dillard CPA


Federal and state withholding (depending upon and varying by state)

Employers are required to submit to their employees a withholding form/certificate, on which the employee documents and confirms their filing status and their number of exemptions.  Employers then are required to use this information to determine the statutorily withholding based upon withholding tables required by the IRS and varying states.  The withholding certificate for the IRS and Georgia are a W-4 and G-4 form respectively.  It is the employees responsibility to complete these forms and then for the employer to withhold these amounts as directed.  All withholding taxes are taken out of an employee’s check and then remitted over to the respective taking authority.  In this capacity, an employer is required to act in a fiduciary capacity in the withholding and payment of these monies.

Unemployment Insurance/Department of Labor

Both the IRS and the state of Georgia assess against employers an unemployment tax.  This tax is paid exclusively by the company, and there are no required withholding or additional taxes being paid by the employee.  Both the IRS and Georgia limit the amount of taxes a company will pay on any given employee to a maximum salary amount per year.  These monies/taxes are due on the first wages paid a particular employee in any given calendar year.  While the IRS assessment rate/percentage is statutory the rate to Georgia fluctuates based upon an individual companies claims experience.


FICA insurance is taken out of an employee’s paycheck and then is matched by the employer.  Like withholdings, FICA taxes taken out of an employees paycheck are treated as fiduciary monies and are required to be submitted over to the IRS with rigidly defined dates, dorms and reporting format and method of payment.  FICA insurance withholdings are calculated based on a prescribed statutory rate and the maximum amount of salary this is based upon is annually indexed for inflation.  These monies are given over to the Social Security Administration for monthly periodic payments to those who qualify when they retire or become disabled.


Medicare Insurance also is an amount an employee is required to be withheld out of their salary and is in turn matched by their employer.  Medicare taxes, FICA and federal withholding are all reported and paid concurrently.  However, unlike FICA taxes, which are only assessed up to a specified annual amount, Medicare taxes are assessed on all of one’s earned income (W-2 wages) regardless of the amount.  Medicare monies are then used to pay for medical expenses for those who qualify.

Electronic Filing EFTPS

EFTPS is the procedure and process that the IRS specifies employers to use to report and pay all payroll taxes.  EFTPS is where employers report and pay IRS monies electronically and via magnetic media.

Because of the many varying reporting formats, forms, methods and electronic reporting requirements, it is most advisable that all employers (regardless of size) utilize and retain a payroll service to handle all of its payroll needs.  Payroll companies will not only process the actual paychecks themselves, but also prepare the required payroll reports and make the needed tax payments.  This process is relatively seamless as most all payroll companies debit your account for the required payroll taxes at the time of payroll check processing.  Payroll companies also have the ability to make electronic payments directly to an employee’s account thereby saving time and money.

At His CPA, P.C. we are committed to doing all we can to help ensure our client’s future success.  One of the best ways we can do that is to refer vendors who can greatly assist in providing efficiencies and economies of sale. Call us today to see how we can help you.