Are you preparing now for a smooth financial year end?

As we head into the final quarter of 2021, there are a handful of things accounting departments should start doing now to be better prepared to close out the current year and head into the new year. Below are a couple of items to remember to do before the clock strikes midnight on December 31 of this year:

• If you are a nonprofit in MA, you need to file an M.G.L. Ch. 180 Corporation Annual Report every year by November 1. The report asks you to double-check your business information, current board members and provide the last board meeting date. You can fill out this report online at the Secretary of the Commonwealth of MA website.
• Review your 2021 consultants and vendors to make sure you have tax id information and updated addresses. This will help in January when you need to send out 1099-NEC or 1099-Misc. Both documents are due January 31, 2022, and chasing this information at the last minute can be stressful.
• Review payroll information before the last payroll of the year to make sure employees W-2 are accurate
  • Double-check that all manual checks are entered into the payroll system
  • Record any third-party sick pay to the payroll system
  • Process any bonus payments so they are reflected in 2021 earnings
  • Review employee deduction and tax withholdings.
• Review any outstanding checks over 60 days old that haven’t cleared your bank accounts. Follow up with vendors to either deposit checks or see if the vendor has lost the check and needs it reissued. This will make your cash balance accurate for year-end and won’t cause any issue when reporting out 1099s in January.
• Remind staff that deductions for flexible spending accounts and retirement plans reset on January 1. Encourage them to review what they are contributing and see if they would like to change the amount of their contributions. The new contribution limits for 401k’s and 403b’s for 2022 will be $20,500 with an additional $6,500 catch up allowance for employees over 50.

These are just some of the steps you can begin to take now to be better prepared to end your financial year without last-minute pressure.

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