Article Table of Contents
- Overview of End of Year Accounting
- Reconciling Bank Accounts
- Reconciling Receivables and Payables
- Preparing an Income Statement
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Working with a CPA
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Filing State and Federal Taxes
- Frequently Asked Questions (FAQ)
Overview of End of Year Accounting
End-of-year accounting is a crucial process that ensures your financial records are accurate, up-to-date, and compliant with legal requirements. This process involves reconciling accounts, preparing financial statements, and working closely with a CPA to file state and federal taxes. Proper end-of-year accounting not only helps in maintaining transparency but also provides a clear picture of your business’s financial health, aiding in strategic planning for the upcoming year.
Reconciling Bank Accounts
Reconciling your bank accounts at the end of the year is essential to ensure that the transactions recorded in your accounting system match your actual bank statements. This process helps identify any discrepancies, such as missing transactions, duplicate entries, or errors, and ensures your financial records are accurate.
Reconciling Receivables and Payables
Reconciliation of receivables and payables involves verifying that all income expected (receivables) and all expenses owed (payables) are accurately recorded. This ensures that your financial statements reflect true figures, preventing any surprises during tax filing or financial reporting.
Preparing an Income Statement
The income statement, also known as the profit and loss statement, summarizes your revenue and expenses over the year, providing insight into your business’s profitability. Preparing this statement is a key part of end-of-year accounting, as it offers a clear view of your financial performance and is a crucial document for tax filings and financial planning.
Working with a CPA
Collaborating with a Certified Public Accountant (CPA) is recommended for end-of-year accounting to ensure compliance with all accounting standards and tax regulations. A CPA can provide expert advice, assist with preparing financial statements, and help with tax planning and filing, ensuring that you meet all legal requirements.
A tax professional must be used when preparing and filing tax returns. This tax preparer will need the “Income and Expense Report” which can be generated using the instructions above. Speak with you CPA about the following items:
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Income and expenses from the business; tax strategy
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Filing Form 1099 for qualifying subcontractors
Filing State and Federal Taxes
Filing state and federal taxes is the final step in the end-of-year accounting process. Accurate financial records, including reconciled accounts and prepared income statements, are essential for correctly calculating and filing your taxes. Ensure all necessary documents are prepared and submitted by the deadlines to avoid penalties.
Reporting
To file taxes, Buildium can prepare for you a report for income and expenses. Income and expenses are aggregated to a house-level view if for more than one home. A home’s total collected rent and other income is a total of each individual resident’s payments and other collected income. Expenses associated with each house such as utility bills and lease payments are accounted for on house’s appropriate expense account. Reports can be located in Buildium’s “Reports” tab, and by selecting “Income Statement” you can view each home’s income and expense figures. Buildium offers many helpful financial reports which can help you run a better house.
1099s
Frequently Asked Questions
This section will address common questions regarding end-of-year accounting, such as deadlines for tax filings, best practices for preparing financial statements, and tips for working with a CPA. This FAQ aims to provide clarity and guidance on the process, helping operators navigate the end-of-year accounting efficiently.
What's my accounting period?
