January 27, 2003

Remember when you were in class, didn’t know the answer to the question and tried to hide behind your book, but you got called on anyway?

You always knew you could have saved yourself a lot of trouble by just being prepared. Well, think of Millian Toms, our local CPA, as the teacher who always knew who was unprepared, and wouldn’t stop calling on you until you got it right.

The fact that it’s tax season isn’t news. The fact that businesses must complete entirely different forms, sometimes on different deadlines, is news. And nothing gets by Millian.

So if you want to make your life that much easier, here’s a basic list of the things you’ll need to bring with you, if you’re running a business, for an appointment with Millian. We’ll get to an individual’s checklist in the next column.

Millian suggests printing this out and using it for a check-off list:

• 1/15/03 - Michigan monthly, quarterly or annual sales, use and income tax withholding (balance it to the annual return due 2/28/03 so you can correct the last return of the year).

• 1/25/03 - Michigan UC Forms 1017 and 1020 for reporting wages subject to Michigan Unemployment Tax ($9,500 maximum per person, per year). Also last chance to balance for the year.

• 1/27/03 – Michigan UC Form 1771 to determine your 2003 tax rate. If you don’t make corrections by 1/27/03, you will live with the wrong rate for one year, possibly overpaying excessively.

• 1/31/03 – Form 941 – Used for reporting gross wages and federal income tax withheld, as well as social security ($84,900 per person maximum) wages and Medicare wages and related taxes. Again, this is your last chance to balance for the year. This form can be filed at a slightly later date, but you still need to balance by the 31^st.

• 1/31/03 – Use Form 940 for reporting gross wages ($7,000 per person maximum) and federal unemployment tax for the year. Payments are made quarterly and this is your last chance to balance for the year without hassle.

• 1/31/03 – Employee’s copy of Form W-2 must be in the mail. The federal, state and city taxes are filed with W-3 forms by 2/28/03. The 28 days between the two due dates allows for corrections before the government gets their copy.

• 1/31/03 – Form’s 1099 for miscellaneous non-employee compensation must be filed. Again the government’s copy is mailed by 2/28/03 with Form 1096, allowing 28 days for corrections. Any individual whom you pay over $600 must receive this form as well as ALL attorneys. Payments to corporations do not have to be reported.

• 1/31/03 – Forms 1099 for interest, dividends, royalties, sales of stock and sales of real estate must be in the mail if the amount is over $10, but reported to the government with Form 1096 by 2/28/03.

• 1/31/03 – Form 8027 to report tips reported by employees.

• 1/31/03 – Form 8300 to report cash transactions of $10,000 or more.

• 2/1/03 – And then there’s the Personal Property Statement which all cities in Michigan require usually by Feb. 1. The state requires cities to accept the statements through Feb. 20.

So now you can see why many CPAs wait until February to start preparing individual returns.

But that’s not all. Those forms listed above are just information returns that must be filed and tied into your total business return.

To complete your business return, you need:

• Your General Ledger or Trial Balance if you do your own bookkeeping.

• Your check book and cash receipts and cash disbursement journals.

• Bank statements reconciled

• Sales and purchase journals if you are on an accrual basis.

• Payroll journal and each employee’s earnings record for the year.

• Year-end inventory total.

• Year-end accounts receivable and payable listings.

This is a list of the minimum documents needed. More documentation may be required based on your individual situation.

Millian M. Toms is a Royal Oak-based CPA and business advisor. She is also an active member of the community including The Optimists and Greater Royal Oak Chamber of Commerce. 

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