Preparing your bookkeeping before meeting with your tax professional can save time, reduce stress, and help avoid costly errors. Clean, accurate records allow your tax preparer to file correctly, maximize deductions, and identify potential issues early.
Below are the essential bookkeeping tasks every business owner should complete before tax season.
Why Proper Bookkeeping Matters Before Tax Filing
When your books are organized, your tax professional can:
- Prepare returns faster
- Reduce the risk of IRS notices or audits
- Identify eligible deductions and credits
- Give better tax planning advice
Disorganized records often lead to delays, higher preparation fees, or incorrect filings.
1. Reconcile All Bank and Credit Card Accounts
Before meeting your tax professional:
- Reconcile every business bank account
- Reconcile all business credit cards
- Ensure balances match bank statements through December 31 (or fiscal year-end)
Unreconciled accounts are one of the most common reasons tax filings get delayed.
2. Review Income for Accuracy and Completeness
Confirm that:
- All income has been recorded
- Deposits match invoices or sales reports
- No personal deposits are included as business income
This step is critical for accurate gross revenue reporting.
3. Categorize All Expenses Correctly
Go through your expenses and make sure:
- Transactions are categorized properly
- Personal expenses are removed
- Uncategorized transactions are cleared
Correct expense categorization helps ensure legitimate deductions are not missed.
4. Verify Owner Contributions and Distributions
Your books should clearly show:
- Owner contributions
- Owner draws or distributions
- Loans to or from the business
These transactions impact equity and tax reporting and must be accurate.
5. Review Payroll Records and Payroll Taxes
If you have employees or pay yourself through payroll:
- Confirm payroll reports match what was filed
- Verify payroll tax payments were made
- Check W-2s and payroll summaries for accuracy
Payroll errors can trigger penalties if not corrected early.
6. Confirm 1099 Information for Contractors
If you paid independent contractors:
- Ensure contractor payments are properly tracked
- Confirm W-9 forms are on file
- Verify totals match your records
Accurate 1099 reporting is required for compliance.
7. Review Sales Tax (If Applicable)
If your business collects sales tax:
- Confirm sales tax collected matches reported amounts
- Verify payments were made on time
- Ensure liabilities are not overstated or understated
Sales tax errors often surface during tax preparation if not reviewed in advance.
8. Prepare Financial Reports
Before meeting your tax professional, have these ready:
- Profit and Loss Statement
- Balance Sheet
- General Ledger
These reports give your tax preparer a full picture of your business finances.
9. Document Asset Purchases and Depreciation
Provide details for:
- Equipment purchases
- Vehicles
- Furniture or large assets
Include purchase dates and amounts so depreciation can be calculated correctly.
10. Address Any Questions or Unusual Transactions
Flag items such as:
- Large one-time expenses
- Loans received or repaid
- Refunds or chargebacks
- Prior-year adjustments
Proactively addressing these avoids confusion and filing delays.
Final Thoughts
Taking time to clean up your bookkeeping before meeting your tax professional leads to smoother filing, fewer corrections, and better tax outcomes. It also helps your business stay compliant and financially healthy year-round.
How Accredited Bookkeeping Can Support Your Business
At Accredited Bookkeeping, we understand the challenges small businesses face when it comes to managing finances. We’re here to help you streamline your bookkeeping processes, avoid unnecessary financial errors, and gain greater clarity about your financial health. Our services are designed to fit the specific needs of your business, giving you peace of mind while you focus on growth.
Contact us today for a free consultation and discover how we can make bookkeeping easier for you.
marianne@accreditedbookkeeping.com
Marianne Kirwan
352-626-0116
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