Let’s dive into this month’s newsletter:
It’s Fall, Y’all!
Can you believe we’re officially starting the fourth quarter of 2023?! Around the office at Lookout Bookkeeping, October brings prepping for the upcoming tax deadlines and the start of year-end planning.
If you filed an extension for your Form 1040 or Form 1120 in April, taxes were filed on Monday, October 16th (unless you’ve received an extension by being in certain disaster zones). I’m thankful that is over!
Spooky-Good Financial Reports
If you’ve been reading my newsletter long enough, you’re probably very familiar with the three main financial statements. Today, I’m sharing three more reports that can give you scary levels of insight into your business:
- A/R Aging Summary: This report shows who owes you money! It includes the amount owed and when the payment is (or was) due.
- Sales By Customer: This report summarizes how much of your sales comes from each one of your customers.
- A/P Aging Summary: This report shows how much you owe each of your vendors and when your payments are
The Wonderful World of W-9s!
What is it?
- The Request for Taxpayer Identification Number & Certification
- A document for any business owner that is used to gather information from contractors/vendors the business owner pays – so you, as the business owner, can issue a 1099 at the end of the year.
Who do I need to collect a W-9 from?
- Anyone that you pay a fee to for a SERVICE – you have the right to ask them for a W-9. This is the business equivalent of ordering a drink and the bartender asks for your ID. It’s a quick check to be sure you can pay them – so you know that the person has an EIN or SSN to claim the payment as income (which allows you to write it off as an expense). S-corps or C-corps are NOT issued a 1099, but they should still provide this form to prove that.
When should I collect a W-9?
- You should collect a W-9 PROACTIVELY, i.e. as soon as you hire a contractor/vendor, so you’re not trying to track them down in January.
What about foreign service providers?
- A W-8 BEN is required instead.
What are some examples of contractors/vendors that I need to get a W-9 from?
- Social Media Managers – VAs – OBMs – Accountants – Bookkeepers – Lawyer – Contract Labor (those who are not W-2 employees)
What happens if I do NOT collect a W-9?
- If you don’t get the W-9 and don’t file 1099s properly, you could get your deductions disallowed and face penalties from the IRS.
Thank you to Shannon Weinstein, CPA for this information from her Keep What You Earn Podcast. For further information: https://bit.ly/KWYE-W9
Have questions? Let us know!
Know a friend who could use our help?
We would love to support them!
The biggest compliment is that you trust us with your bookkeeping.
The second biggest compliment is when you send your friends our way!
Refer a business owner who signs up for monthly services and receive a $100 cash referral gift. You can send this intake link to your friends: bit.ly/LKTLead
Your support of our small business makes all of this possible, thank you!
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Starting a new business?
One of the first (and most important) things you can do to set your new business up for success is to choose the correct form of business entity!
Click the button below to get access to the “Structuring Your Business For Success” guide to learn the pros and cons of the most common entity types
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