BUSINESS YEAR END INFORMATION   As your company's year end approaches, use the checklists below to gather all of the necessary documents for tax preparation.   Clients using QuickBooks or Peachtree.  Year End Checklist QB or Peachtree Clients using other accounting software Year End Checklist Clients not using computerized accounting software  Year End Checklist manual checkbook   VEHICLE COMPENSATION – EMPLOYER PROVIDED VEHICLES               An employer provided vehicle is a fringe benefit that may be taxable to the employee, depending on the employee’s use and the restrictions set by the employer.               Tax-free situations:   1.      Vehicle is used 100% for business 2.      De minimis use: Personal use too small to account for 3.      Employer has written policy against personal use.     Note: For vehicles not qualifying for a tax-free situation, the employer calculates the value of personal use and includes it in the employees Form W-2 as taxable wages. This rule also applies to the owner of a company.   The information that we will need to calculate the employee's personal use, is the Name of the vehicle, year purchased, FMV of vehicle the first year it is used personally, the  total miles driven for the year, and the total personal miles for the year.  If the company does not pay for all of the fuel, maintenance and insurance, an adjustment can be made for the fuel portion.  Please advise us of this.  This calculation needs to be made before W2s are prepared and before your final 941 deposit for the calendar year. Thus, we need this information before 12/31 each year.    OFFICER HEALTH INSURANCE               An owner-employee who owns more than two percent of the S corporation stock can deduct 100 percent of the amount paid for medical insurance for himself, his spouse and dependents. The gross wages should be included on form W-2, however the wages are not subject to FICA and Medicare tax.               Before December 31st, calculate the amount of annual health insurance premiums for each shareholder and give that information to your W2 preparer (either Planche · Politz · Ledet LLC or your payroll provider such as Paychex or ADP).   REASONABLE COMPENSATION - OFFICER/SHAREHOLDER           Shareholders of S corporations that own more than 2% of stock in the company, and are activetly involved in the company are required to have reasonable compensation.  There is no rigid set of rules to determine reasonable compensation.     IMPUTED INTEREST ON SHAREHOLDER LOANS                When a shareholder provides cash to a corporation, it is often advantageous to structure the payment as a loan as opposed to a purchase of stock.  Under a loan agreement, repayment of principal is generally nontaxable to the recipent, and interest on the loan is deductible by the corporation.  However, if the loan is not properly documented, the payment will be considered an equity transaction, and repayments will be treated as taxable dividends.               Loans between C corporations and shareholders should have Loan agreements in the proper legal form and executed in an arms-length manner.  Interest should be paid at least annually. If it is not, interest should be imputed and the related adjustment made to the books of the company.                   If you  have loaned money to your company, or your company has loaned money to you, please contact us before December 31st, so we can calcuate the amount of interest due so that it may be paid instead of imputed.  Paying the interest before December 31st allows for more favorable tax treatment than imputed interest.