Starting the new year right: Reminders for your business
When a new year starts, it’s important for businesses to start thinking about a few key tasks that can help ensure their financial health and compliance. Here are some reminders for your business in the coming year:
1. Update mileage rates: The Internal Revenue Service (IRS) updates the standard mileage rate each year, and it’s important for businesses to keep track of these changes. In 2023, the standard mileage rate for business use of a car, van, pickup truck, or panel truck will likely change. Make sure to update your records and any reimbursement policies to reflect any mileage reimbursement rates from the IRS.
2. Update W-2 and W-4 documents: As part of your change of year financial tasks, it’s important to review and update your W-2 Wage and Tax Statement and W-4 Employee Withholding Certificate forms for your employees. This includes making sure all employee information is accurate, including names, addresses, and Social Security numbers, and making any necessary changes to the number of allowances claimed.
3. Make tax bracket inflation adjustments: The IRS adjusts tax brackets for inflation, and it’s important for businesses to be aware of these changes. Make sure to review your tax strategy and adjust any withholding or estimated tax payments accordingly.
4. Review any state-specific changes impacting your business: The Illinois Department of Revenue or other state revenue agency will make updates on their website to keep individuals and businesses apprised of changes.
5. Review your employee benefits: It’s important to regularly review your employee benefits to make sure they are still meeting the needs of your workforce. Consider offering new benefits or adjusting existing ones to attract and retain top talent. Also, be sure to reach out to your team to see if they wish to make any changes to their retirement plan or tax withholdings.
6. Review and update your budget: It’s a good idea to review your budget at the beginning of each year to make sure it accurately reflects your expected income and expenses. This can help you identify any potential financial issues and take corrective action before they become a problem.
7. Review your insurance coverage: As your business grows and changes, it’s important to periodically review your insurance coverage to make sure it still meets your needs. This includes liability coverage, property coverage, and any specialized coverage that may be required for your industry.
8. Consider implementing new technology: Technology can help businesses streamline their operations and improve efficiency. In 2023, consider implementing new software or systems that can help your business run more smoothly, such as cloud-based accounting systems or project management tools.
Ensuring you review these tasks can help ensure that your business is prepared for the new year and avoid any potential tax or compliance issues. If you have any questions or need assistance with these or other accounting or technology needs, please contact the experts at MCK!