Lis Lee Accounting LLC

First priority is to get all of your Form W-9s in hand ASAP! You need a Form W-9 from your vendors to confirm their information and to determine whether or not you must file a Form 1099 for payments made to them. Request a Form 1099 from your landlord, attorney, and any vendor who is not your employee who performed services for your company. It is best practice to require this documentation before making payment to these vendors, but if you don’t have a Form W-9 on file yet for them, send your requests on out now so you have plenty of time to get those Form 1099s prepped before the January 31 due date! Read on for more info on Form 1099 filing in 2020…

Previously, Form 1099-MISC was filed for each non-employee (independent contractor) to whom you have paid at least $600 (cash or check/ACH) for services performed for your business. This year, those payments will be reported on the new Form 1099-NEC. When reporting non-employee compensation, the filing deadline is January 31. These payments are now reported in Box 1 of Form 1099-NEC. If you are filing less than 250 forms, you can file on paper. If you file 250 or more returns, you must file electronically. If you are early to the game, you can order your forms online. Paper forms can be found at most office supply stores (Staples, Office Depot, etc.). You may also choose to e-file. Many accounting softwares and/or payroll softwares offer an e-file option within the platform. Check with your software provider to see if this is available to you and make sure you file by their required date. Besides non-employee compensation, be sure to analyze these two additional common categories for reporting:

  • Business Rent Payments should still be reported in box 1 of Form 1099-MISC. For business rent payments, you do not have to report these payments on Form 1099-MISC if you paid them to a real estate agent or property manager.
  • Attorney Fees paid should now be reported in box 1 of Form 1099-NEC. NOTE/ Attorney fees DO still need to be reported even if they are a corporation.

If you paid the vendor by credit card or a third- party network (like PayPal for business), those payments do not need to be reported as the credit card company or third party are required to report them. A few other common exceptions that typically do NOT need to be reported are as follows:

  • Payments to a corporation (including an LLC treated as a C or S corporation). NOTE/ Attorney fees DO still need to be reported even if they are a corporation.
  • Payments for merchandise, telephone, freight, and storage.

If filed on paper, Form 1099 filings should be filed with one Form 1096 (as a sort of summary coversheet). For the full list of instructions, see the IRS Instructions for Form 1099-MISC and Form 1099-NEC

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

It’s that time of year

Now is a great time of year to think about investing in your business.  There are going to be plenty of upcoming sales this quarter (for software, digital products, and physical products) so let’s talk about how you can time it right to invest in your business at a great price.  

Over time, I’ve used this same approach to add tools and resources to my business to support operations and growth in a sustainable way.  Each item or tool I’ve added has special meaning and value 1)  I know that my business earned the dollars to support the spend which is satisfying in itself; and 2) each addition was well thought out and intentional.

Questions to ask yourself

When you think about purchasing something for your business, you want to ask yourself a few questions to assess needs vs. wants along with appropriate timing.  

  • Is this purchase necessary for my business?  Is this item necessary to support business operations?  This one is kind of a no-brainer, but still important to start with.  Sometimes you must spend on items that are absolutely necessary, but may not be directly related to revenue generating activities.  This is a great question to ask in all circumstances as there are items you may THINK you NEED, but they are actually just shiny “wants” that are a distraction and not the best use of your funds.  
  • Will this purchase support my business growth?  Will this purchase generate revenue?  Will you be able to turn around and make a profit using this new product or tool?  If you will be able to make a return on your investment, that’s the ultimate purchase win.  Will it enable you to offer a new service or work more efficiently?  Will it set you up for growth without the growing pains?
  • Is it time for this yet?  Sometimes a purchase may not be a bad idea, but it’s a bit too soon.  It may be a great product or service, but your business may not be able to support the spend yet or it may be a tool or software that is overkill for the stage you’re in.  
  • Does this purchase fit my current means?  Is it in budget?  Even if it would really be nice, but if it’s going to break the bank you may want to hold off until you have the plan or the funds in place to comfortably make it work without putting your cash flow and bottom line unnecessarily at risk.

Once you’ve answered these questions, you should be able to more confidently make the decision to purchase or not to purchase.  If you decide to purchase, make sure you document and record the transaction so you can see how it impacts your business as well as your tax return.

If you’re ready to invest in your business, I’ve got something exciting to share with you. In January 2021, I’m launching a 6-week LIVE program to walk you step-by-step through how to implement the most foundational financial systems and processes in your business so you can move from feeling stuck and unsure to in-control and empowered in your business decision-making. I’m opening up 10 spots to work with me to create true transformation – if you want in, book a call here (spots are limited!).

Q4 brings the possibility of a fresh start for a strong finish.  Right now, many business owners are still feeling overwhelmed and disheartened as they manage massive change in their business and personal life.  The sense of potential that comes from a temporal landmark like Q4 or the holiday sales season may be just what we need to give us the oomph to make progress on that goal or take action on that one thing you keep thinking about, but not doing.  I say ride that potential as far as you can and use it to your advantage!  

A couple of practical tips to make this work for you…

  • Set aside some time over the next few days or this weekend to reflect and plan.  Review your current goals and tasks and create some realistic expectations for the next few months.  Make sure to take the holidays into consideration if you celebrate as you may want to give yourself extra space during that time to rest, recharge, and be present.
  • Make it a date and put it on a calendar (paper or digital) so it’s in front of you day to day and week to week and has time allotted to it.  For this I like to put down everything I know is going to happen to see what space I’m working with, then I can visualize what time I’m working with to achieve my goals and complete tasks and projects.  I especially utilize recurring time slots for certain projects/tasks or I block out specific windows of time for others.  
  • A few key business points to remember for this quarter:
    1. Talk to your staff and customers and ask them for their feedback on their experience with your business this year.
    2. Review what’s working and what’s not with your offers, products, or services.
    3. If you’re launching any special sales or products for the holidays – make that part of your Q4 strategy.  Here’s a great list of pertinent dates.
    4. Get caught up or stay on top of your bookkeeping as year end is right around the corner.  If you’re up-to-date, end-of-year filing and reporting is going to be so much easier for you. If you need help with this part let’s set up a time to talk it over (you can book your call here). I’m also offering a new online training in early 2021 for those of you who would like support, but aren’t quite ready to jump into a one-on-one relationship yet. Business Financial Foundations (B.F.F.) is a 6-week LIVE program to walk you step-by-step through how to implement the most foundational financial systems and processes in your business. I’m opening up just 10 spots to work with me to create true transformation and we’re getting started on January 7th. If you want in, let’s hop on a call and talk some business strategy! Book a call with me here.

Hope this overview was helpful, leave a comment below with how you are approaching Q4. Would love to hear what you’re up to!

October 31Halloween
November 11Veteran’s Day
November 26Thanksgiving Day
November 27Black Friday
November 28Small Business Saturday
November 30Cyber Monday
December 10 – December 18Hanukkah
December 24Christmas Eve
December 25 Christmas Day
December 31New Year’s Eve
December 26 – January 1Kwanzaa

Many of you just filed your 2019 taxes a few weeks ago.  Hopefully it was a smooth process, but I know you may have been scrambling at the last minute to get everything together.  That’s why I’m starting now with reminders for year-end 2020!  We’re just over halfway through the year so now is a great time to get on track with your 2020 financials so your year-end reporting and tax returns are a breeze this next time through.

What is year-end reporting?  Besides the tax prep piece, companies typically prepare their financial reports for a 12-month period at the end of the year to review their performance and plan for the following year.  Don’t miss out on this important performance review action for your company!  

What can you do now to prepare?  Usually, companies begin preparations for the year-end in the fall (for a calendar year-end), but that is assuming they are all caught up on their books.  If you’re behind for 2020, now is a great time to catch-up and set yourself up for success as you get closer to year-end.  

If you’re feeling less than motivated about it, just take a moment to think about how you’ll feel when you’re back on track and how you’ll feel next year when there’s no back-log.  If you’re interested in a DIY approach click here to schedule a phone call to review your options.  If you’re looking for more support and someone to jump in to help you catch up, book a call here to find out how we can work together to get you where you need to be.

 

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

We’re officially one week out from the close of Q3 and the start of Q4!  What are you doing to prepare?  Personally, I’m listening to PwC’s “The quarter close – Q3 2019” to make sure I’m up to date on the latest in accounting and financial reporting.  You can find the print and audio versions here.