10 Helpful Tips for Tax Planning
December 17, 2018
With the new year now underway, many of us are setting goals and establishing resolutions that will set us up for success in 2019. A big part of hitting our goals, of course, is understanding what went well during the previous year, and where things could improve.
This is certainly true in farming, which is why we turned to one of our resident experts, Scott Nusbaum, who is not only a Product Manager with Trimble Ag Business Solutions, he is also a Certified Public Accountant and has some keen insights in how farmers can leverage accounting tips to finish off the year strong.
Year-End Accounting Tips
- Review Year-End Enterprise Statements — The end of the year is a great time to start analyzing the financial results for each enterprise. Trimble Ag Software provides comprehensive cost analysis for each one of your field, livestock, equipment, and people enterprises. The Enterprise Statements will pull costs and revenue directly from your accounting records. However, for this to happen it’s important that you allocate all of the important costs and revenues to an enterprise. If you’d like a report of any un-allocated transactions, try the General Ledger Detail Report and use the option to “Select specific detail items to print”. When doing this you will be able to select the “Unassigned” detail item to get a report of any transactions that you may have forgotten to allocate.
- Update your Software — Trimble Ag Software always has a year-end accounting update in January (for the previous year). This update is critical for accounting purposes as it includes updates for printing and electronic submission of year-end tax forms. Additionally, it includes updates for Federal Tax Withholding for the new year. If you are subscribed to maintenance you can update by going to the Help menu and selecting Check for Updates. If you are not subscribed to maintenance, you can order it through the Marketplace in Trimble Ag Software or by calling the Trimble Sales Staff at (800) 282-4103 or emailing TABS_Sales@Trimble.com.
- Printing 1099s — As year-end approaches you’ll need to start planning for creating 1099s for your landlords and other vendors. The Purchases Report can be used to get a list of transactions with totals for any 1099 vendors. If you’re using the Advanced Accounting module you can also print Forms 1099-MISC and 1096. Or better yet, use the software for electronic submission of Forms 1099-MISC, 1099-INT and 1096. For more information check this out.
- Printing W-2s — As year-end approaches you’ll need to start planning for creating W-2s for your employees. Trimble Ag Software Advanced Accounting makes this simple! The Employee’s Earnings Report can be used to get a list of payroll details for all of your employees. You can also print Forms W-2 and W-3. Or better yet, use the software for electronic submission of Forms 1099-MISC, 1099-INT and 1096. For more information check this out.
- Ordering blank W-2s and 1099s — If you will be printing your 1099s and/or W-2s with Trimble Ag Software, be sure to order your forms soon! Trimble Ag Software has partnered with Nelco Solutions to provide forms that are guaranteed to work with your software. Click here for more information.
- Reconcile Bank Accounts — Year-end is one time of the year where Bank Reconciliation is extra critical! Before you start printing year-end financial reports, make sure that you have your bank statement completely reconciled for the year.
- Review Supply Inventories — Be sure to print a Supplies Inventory report for the end of the year and review it closely. If there are supplies that are off by a small amount, you can adjust them in the Adjust Supplies area. Supply Inventories that are off by a large amount can be due to having purchases or jobs that are incorrect. If you find that your inventories are off by a large amount, you should review all purchases and uses (jobs) for the material. The General Ledger Detail Report can be filtered by supplies to see individual purchases for selected supplies. And the Jobs tab has a filter where you can filter your jobs for selected supplies.
- Review Crop Inventories — Be sure to print a Harvested Crop Inventory report for the end of the year and review it closely. If there are crop inventories that are off by a small amount, you can adjust them in the Adjust Harvested Crop area. Harvested Crop Inventories that are off by a large amount can be due to having Crop Sales or Field Harvest Records that are incorrect. If you find that your inventories are off by a large amount, you should review all Crop Sales and Harvest Jobs for the Crop. The General Ledger Detail Report can be filtered by Crop Sale accounts to see individual sales for selected crops. And the Jobs tab has a filter where you can filter your jobs for the job type of Harvested to see just harvest jobs.
- Update Depreciation — Depreciation is a key cost for each of your pieces of equipment. This cost gets passed on to the fields where the equipment has been used. If you are using the Advanced Accounting module be sure to enter your depreciation for the year.
- Printing Reports for Accountants, Bankers, and Others — Year-end is a time to review financial results with bankers, accountants, tax preparers, owners and others. The following is a list of some key reports that are useful at year.
- Tax Schedule Reports — Provides a report that is laid out to match your Schedule F and other year-end tax forms
- General Ledger Detail Report — Provides a list of transactions by account for the year along with a balance of the account.
- Market Value Balance Sheet — The Advanced Accounting module includes a Market Value area where you can enter current values for all your assets. Once your values are entered you can print a Market Value Balance Sheet along with a supporting schedule with all the details. This report is particularly useful for bankers and other lenders
- Cash Flows Statement — The Advanced Accounting module includes a cash flows statement that helps you to easily analyze where your cash came from for the year and where it went!
- Financial Measure Report — The Advanced Accounting module includes a Financial Measures Report that computes over 20 Farm Financial Ratios that helps you to analyze the financial performance of your farming operation. This report provides a “drill down” button that lets you quickly dig into the details that are used for each ratio.
- Save as PDF — If you’d rather not print your reports, all reports have options for saving in different formats including PDF files that can be e-mailed and shared with others.
- Year-end — Once you are sure that your books are correct and your taxes have been filed, you can close your year using the ‘Year End’ option on the Accounting menu. The year-end process is simple and provides a checklist of items to be sure you complete. However, the most important part of year-end is that it is not something you typically do at the end of the year (I know that’s counter intuitive). Year End can be performed anytime during the New Year. The software is designed so that you can start entering transactions and printing reports for the new year, while the old year is still open. So you can relax and do your year-end after you are sure everything is correct.
For more information on Trimble Ag Software’s Advanced Accounting, visit us today.