2016 year-end checklist for businesses
December 6, 2016
By John W. Mashni
Originally published in Focus Magazine
John Mashni is an attorney with Foster Swift Collins & Smith, PC. As a former entrepreneur, business owner and manager, John has a deep understanding of the businesses he represents as well as the knowledge and savvy of a seasoned attorney. He helps clients do deals, protect assets and plan for the future through his practice. Here’s his recommended end of year to-do list for small business owners:
Meet with your tax advisors
There may be last minute planning possibilities for 2016. Consult with your tax advisors while you still have time to act in 2016. You don’t want to be scrambling on Dec. 31 (which is a Saturday this year).
Don’t assume your CPA, lawyer or financial advisor is going to automatically suggest ways to minimize your tax liability. Be proactive! Also remember each offers a different and valuable perspective you should consider to make decisions that are best for your business.
Also, be sure you understand the nexus standards for Michigan business taxes and if they have implications for your company. The Michigan Department of Treasury issued a release that addresses the sales and use tax presumption for out-of-state sellers; the nexus standards for the corporate income tax; and the nexus standards for flow-through entity withholding. Click here for details.
Carefully examine your records from the previous year to determine that you have everything you need to ensure a smooth tax season. This includes making sure you have paperwork for employees and independent contractors so W-2s and Form 1099-MISCs can be issued.
Have your annual meeting and create your annual meeting minutes
It is important to document the activities and decisions at your annual meeting and accompanying meeting minutes. Make sure this happens in 2016.
Make sure distributions from your business are on track
If you need to make a distribution from your business, now is the time to evaluate. Consult your tax advisors now.
Yearly gifts and charitable donations
Many business owners plan to give away a specific amount of money as part of an estate or succession plan. If you would like to donate to a charity and have a deduction for the 2016 tax year, you have until Dec. 31 to make the gift. Gifts made after Dec. 31 are included on 2017 tax returns. Make sure you have given the proper amount and within the proper time frame. Again, plan ahead and discuss the most advantageous way to make a gift with your attorney or CPA.
Look at the states in which you are incorporated and make sure that you are aware of the due dates for the filing of annual reports in the coming year.
Articles of amendment or IRS documents
Examine the previous year and determine if there have been any changes that would require the filing of articles of amendment or updates with the IRS.
Permits and licenses
Examine your permits and licenses – do any require renewal in the coming year? Does any information need to be updated?
Examine new business opportunities
What were your areas of growth in the past year? Should you file a new trademark? A new assumed name? Also don’t forget to monitor your intellectual property.
Monitor and protect intellectual property
In today’s digital world, a company’s intellectual property can be a major competitive advantage. Take time to review what proactive and protective measures your company has in place to secure its intellectual property rights (copyrights, trademarks and service marks, patents and trade secrets). This effort is a worthwhile investment to ensure your company’s competitive standing in the marketplace and its financial success.