Year-End Checklist: Preparing Your Books for Tax Season

Michelle Browne - 11/18/2025

As the year draws to a close, small business owners face one of the most important financial responsibilities of the year: preparing for tax season. Having your books in order not only makes filing easier but also helps you maximize deductions, avoid penalties, and gain a clear picture of your business’s financial health.

At Browne Bookkeeping Services, we know how overwhelming tax preparation can feel. That’s why we’ve put together this year-end checklist to help you get your financial records organized and ready for tax season.

1. Reconcile All Accounts

Make sure your bank accounts, credit cards, and loan balances match what’s in your bookkeeping system. Reconciling ensures there are no errors or missing transactions that could throw off your financial reports.

Tip: Don’t just rely on your bank balance. Always compare statements with your accounting records for accuracy.

2. Review Outstanding Invoices and Bills

Check your accounts receivable (money owed to you) and accounts payable (bills you owe). Follow up on any unpaid invoices before year-end and pay off or schedule outstanding vendor bills. This will give you a more accurate picture of your cash flow.

3. Categorize and Review Expenses

Make sure all expenses are properly categorized. This helps you take advantage of deductions for things like office supplies, mileage, software subscriptions, and professional services. Misclassified expenses could mean missed opportunities at tax time.

4. Update Payroll and Contractor Records

Confirm employee W-2s and contractor 1099s are accurate and up to date. Businesses that paid $600 or more to a contractor during the year will need to issue 1099s by the IRS deadline.

Pro Tip: Start this process early to avoid last-minute scrambling in January.

5. Take Stock of Assets and Inventory

If your business holds inventory or fixed assets, perform a year-end count. Record depreciation for assets and ensure inventory is valued correctly. This step is essential for both tax compliance and financial planning.

6. Review Profit and Loss & Balance Sheet

Your Profit and Loss Statement shows your income and expenses, while your Balance Sheet outlines your assets, liabilities, and equity. Reviewing these reports before filing taxes ensures accuracy and highlights areas where you may save on taxes.

7. Gather Tax Documents

Collect all relevant tax forms such as:

• Bank and loan statements
  
  

• Payroll reports
  
  

• Receipts for deductible expenses
  
  

• Last year’s tax return for reference
  
  

Having everything in one place makes your accountant’s job smoother and reduces the risk of delays.

8. Plan for Next Year

Tax season is not just about looking back—it’s about preparing ahead. Consider meeting with your bookkeeper or tax professional to plan for the new year. Setting financial goals, adjusting budgets, and implementing better systems now will pay off when next year’s tax season arrives.

How Browne Bookkeeping Services Can Help

Preparing for tax season doesn’t have to feel overwhelming. At Browne Bookkeeping Services, we specialize in helping small business owners stay organized, compliant, and confident in their numbers. Whether it’s reconciling accounts, issuing 1099s, or reviewing financial statements, we’re here to take the stress out of year-end bookkeeping.

Ready to simplify your tax season? Contact us today and let’s get your books in order before the year closes.