I wanted to give you an end of year checklist with the knowledge that once you check these things off, your 2020 stuff is in the books! If you run your business on the January to December calendar year, follow these steps to close your year out over the next few weeks!
It is almost the end of 2020 (fanfare!) and I know most of us are relieved and grateful for the new year. This past year didn’t go as planned for anyone I know. Yet, many people learned to pivot, change, and thrive this year. Never underestimate the determination of an entrepreneur.
End of Year Checklist
Close out your income for 2020.
After the 31st, no more income counts for 2020. You should have your gross numbers immediately if you have been tracking your income monthly. Print out reports from Stripe, PayPal, and any other payment processor you use. Keep these for your taxes.
Organize your receipts by month
If you don’t keep your receipts by month already, go ahead and sort them into envelopes, by month, and total the amount of the receipts on the outside of the envelope. You can add the 12 monthly totals together to easily find what you paid in expenses in 2020.
Know your regular monthly expenses for 2020.
Again, if you don’t total these monthly, go ahead and add up your regular monthly expenses such as your phone, rent, internet, and software subscriptions. You need this total for your taxes as well.
Print out the report of your tax deposits
In the U.S. you have until January 31st to pay your fourth quarter taxes. If you follow my method, however, you are withholding and depositing taxes with each paycheck throughout the year. This means 26 deposits in 2020. If you used the Electronic Federal Tax Payment System (EFTPS) you can just print a report of your deposits and have it for your taxes.
Make sure you send your returns for of your payroll tax deposits
If your bookkeeper will run you an annual report, grab it and have it for taxes. The same with your software, run those reports if you paid employer taxes to make filing your final 2020 940 and 941 easier. If your bookkeeper or accountant does this for you, bonus! Just make sure you sign and mail these returns on time.
Recalculate your Breakthrough Number for Q1 2021
Have your expenses changed? Do you still need all of the things you pay for? Take time to run your numbers and adjust your emergency fund deposit as needed to cover any changes. This is also the time to check in on your cyclical fund deposit for any changes in 2021.
Finally, celebrate the end of 2020
Check all of these things off the list, and feel free to dance around the living room. I won’t judge. The new year brings 365 new days of opportunities, growth, and success.
Wishing you the very best for 2021. Happy Entrepreneuring!