Organizing Year-End Paperwork
Getting your business ready for tax time is a crucial step that can significantly impact your financial health and compliance with the law. As a business owner, understanding your tax obligations and preparing for them can feel overwhelming. However, with the right approach and knowledge, you can navigate this process smoothly.
Get Paid and Send Reminders
Make sure you have no unpaid invoices waiting to be sent out. If you do, don’t wait any longer. If you have insurance companies or patients who haven’t paid their invoices yet, begin the follow-up process right away.
Record All Expenses
Close out your practice’s financial year by making sure you’ve properly recorded and updated all your income and expenses. Falling behind on recording or categorizing expenses can make the new year messier than it needs to be and can lead to undesirable surprises down the line.
Properly recording all expenses in your accounting software will keep your numbers accurate. It’ll also help your CPA find all your tax-deductible expenses easily when they assist you.
Pay Any Outstanding Invoices
While making sure your practice is receiving payments, you should also confirm that all your unpaid vendor debts, bills and employee payments are squared away before the new year.
Consider Annual Bonuses
A bonus not only shows your appreciation for your hardworking employees but also boosts morale going into the new year. Additionally, if you pay out your annual bonuses before December 31, the IRS considers them a deductible expense which will lower your taxable income.
Purchase Medical and Office Equipment
If you’ve been eyeing some new medical or office equipment for your healthcare practice, now might be the time to buy. Purchasing qualifying equipment and implementing it before the end of the year can allow you to expense the cost up to a certain amount.
Plus, end-of-the-year sales make it easy to find just the right price for your clinic.
Verify Employee Information
Verify past and current employee contact information and send out W-2s and 1099s to avoid unnecessary delays in the delivery of these important documents.
Review Compliance Materials
The end of the year is also a good time to review and update HIPAA policies and training programs. It’s essential to regularly review all corporate documents and agreements to ensure your healthcare practice maintains ongoing compliance with state and federal healthcare laws.
Practices should also confirm that they’re up to date with their third-party contracts — especially with third parties who might access practice or patient records. Now is also a smart time to schedule updated privacy and compliance training for staff.
Review and Update Employee Policy Manual
Review your practice’s employee policy manual, and then update it as needed. Practices should make sure the policy manual addresses any new or modified requirements for existing and new hires.
Conclusion
Diligent record-keeping, understanding deductible expenses, and knowing your filing requirements are vital components of your tax preparation strategy. By proactively organizing your financial documents and consulting with a tax professional, you can ensure that you meet all necessary deadlines, take advantage of available deductions and ultimately set your business up for success in the new year.
