Another year is over! Now if you are like me, you will need to get your financial records ready for 1099s and tax time. If you have had Contract Labor in 2011, or if you have paid out royalties, or paid fees to an attorney, you will need to submit 1099s for each person to whom you paid more than $600 . You will need to send one copy to each person by January 31 and one copy to the government by the end of February. And beware: tucked into Obama’s healthcare law are new regulations for 1099s starting with 2011.
As a professional bookkeeper, I’ve done this for many years, so I have a handle on it. But if you are new to the process, here are a few tips. Have you entered data throughout the year? Is your 2011 data up-to-date? Mine is, so for me now, it is a matter of just four simple steps:
- reconcile my December bank account statement with my Big E-Z bookkeeping system.
- print my Year-To-Date Income and Expenses from the 2011 Big E-Z Summary file,
- gather my data to prepare my 1099s from the Subcategories&1099s section. I usually enter Contract Labor as a Main Expense Category and then I break it down into the individual 1099s on the Subcategory level. I enter each person’s name, address, and even Tax I.D. number if necessary. There are enough lines on the Checks worksheet to do that and enough columns for 100 subcategories.
- determine my taxable and non taxable sales to prepare my sales tax return. I keep track of this on my Deposits worksheet where there is a column for sales tax to be recorded.
And that is pretty much it! Read my next blog for tips on how to streamline the 2012 Big E-Z Bookkeeping categories for Tax Time.
Tags: 2012 Big E-Z Bookkeeping System, new 1099 tax regulation changes, Obamacare's 1099 changes, preparing 1099s, reporting contract labor, tax time, tips for taxes