Biz Tips
by Patti Komara
This audit was from the Indiana Dept. of Workforce Development for the last three years. After they looked carefully into our books for the last two years they came up with such a little amount they could bill us for, not only did they not charge us anything, but they said they weren't going to bother looking into the third year. They said it probably wouldn't be worth it. Whew...good for us. However, I was reminded of a few key things in bookkeeping for our type of business:
1. For reimbursement purposes, always get a receipt. For instance, we had one of our office girls go to the school supply store, buy some products with her credit card and we would reimburse her. Because it was made out to her name, it was scrutinized. They will ask for verification for any check made out to an employee. If an employee buys something for the gym and loses or forgets the receipt, we don't reimburse them. We cannot take the deduction without a receipt, so why should we reimburse them? All of our department managers have a company credit card, so we usually do not have this issue.
2. Keep your general ledger as explicit as it can be--really explain what it is you bought.
3. Get a W-9 from anyone who provides a service for you who isn’t on your payroll. The state wants you to pay unemployment taxes on them.
4. Don't write a check out to an employee for a wedding gift, graduation, anniversary, etc. Any money you pay to a person who works for you HAS to have taxes taken out. If you want to give them a $100 gift, give them a bonus on their next check.
5. If you give an employee a gift card, that should be added to their W-2. They need to pay taxes on that value.
I will tell you that it pays to do things by the book. Don't be foolish and figure you won't get caught. It's just NOT worth it. For more information from Tumblebear Connection on running a successful gymnastics school... click HERE.