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Year-End Tax Prep Checklist for Small Businesses

Close the year with confidence. Use this practical checklist to organize records, capture deductions, and set up a smoother tax filing season

Categories: Tax

Tuesday, Nov. 25 | 4 min read

Why year-end prep matters

Finishing the year organized saves time, reduces stress, and helps you capture deductions you might otherwise miss. This checklist from King King & Associates, P.A. outlines what to do now so filing season is faster—and potentially less costly.

1) Reconcile your books

  • Reconcile bank and credit-card accounts through the most recent statement.

  • Match invoices, deposits, and payouts to your accounting system.

  • Clear uncategorized transactions and old “Ask My Accountant” entries.

Pro tip: If you use multiple payment processors (e.g., Stripe, PayPal, POS), confirm all fee deductions are recorded.

2) Verify income accuracy

  • Compare your sales reports to your general ledger.

  • Ensure 1099-reportable payments are tagged correctly.

  • If you sell online, confirm marketplace/third-party platform totals match your books.

3) Sweep for missed deductions

  • Business mileage (keep a log or credible reconstruction).

  • Home office (regular and exclusive use; keep square-footage notes).

  • Professional fees, software subscriptions, bank/processor fees.

  • Marketing & advertising, education, and industry memberships.

  • Small tools & supplies and de minimis purchases.

Action: Create a “Year-End Deductions” folder in your drive and drop receipts or statements you may have overlooked.

4) Review payroll & contractor compliance

  • Confirm all W-2 employee data (legal names, addresses, SSNs) and benefits.

  • Validate contractor details (legal name, TIN, W-9 on file) for 1099-NEC.

  • Check that officer compensation and owner draws are handled properly for your entity type.

Deadlines to note: Forms W-2 and 1099-NEC are due to recipients and the IRS in January (electronic filing recommended).

5) Inventory and cost of goods sold (if applicable)

  • Perform a physical count at year-end and reconcile to the books.

  • Write down obsolete or damaged inventory.

  • Review your capitalization policy for tools/equipment.

6) Fixed assets & depreciation

  • List new equipment placed in service this year.

  • Gather purchase invoices and in-service dates.

  • Flag disposals (sold, scrapped, traded) so your depreciation schedule is updated.

7) Retirement & benefits check

  • Confirm owner and employee contributions (401(k), SIMPLE, SEP) are recorded.

  • Note any year-end moves you plan (subject to plan and tax rules).

  • Capture health insurance premiums and HSA contributions in your books.

8) Sales & use tax tidy-up

  • Compare collected tax to returns filed; resolve any variances.

  • Review nexus and registrations if you sell across state lines.

  • Document exempt sales with valid certificates.

9) Entity-specific touch-points

  • S-Corps/Corps: Reasonable compensation, shareholder basis tracking, loans to/from shareholders.

  • Partnerships/LLCs: Member distributions vs. guaranteed payments, partner basis.

  • Sole Props: Schedule C categories aligned; separate personal vs. business.

10) Organize your “send to CPA” packet

Create three folders:

  1. Financials: Year-end trial balance, P&L, balance sheet, cash flow; bank/credit-card statements; payroll summaries.

  2. Supporting Docs: Asset purchases/disposals, loan statements, inventory count, major contracts, lease agreements.

  3. Compliance: Prior-year tax return, notices received, W-9s, 1099/W-2 drafts, sales-tax filings.

Format tip: Export PDFs for statements and a single Excel/CSV for transaction details by account.

11) Plan, don’t just report

  • If your profit is higher or lower than expected, run a quick projection.

  • Discuss potential deferrals/accelerations, write-offs, and safe-harbor strategies with your CPA before year-end.

  • Sketch a simple 90-day cash-flow forecast to anticipate Q1 obligations.

12) Lock your books (after review)

When everything ties out, close the period and set user permissions to prevent accidental changes. This safeguards the integrity of your tax numbers.

How King King & Associates, P.A. can help

  • Year-End Review: We reconcile your accounts, sweep for missed deductions, and prepare a clean tax-ready package.

  • Tax Strategy Session: A focused meeting to discuss projections and year-end moves.

  • Filing & Compliance: W-2s/1099s, income-tax returns, sales-tax filings, and reminders—done right and on time.

Take Control of Your Finances Today

Schedule your Year-End Review today. We’ll make tax season simpler—and give you back your time.

Schedule consultation

Disclaimer: This article provides general information and isn’t tax, legal, or financial advice. Consult your advisor about your specific situation.