Year-End Tax Prep: 10 Smart Steps for Small Business Success

Don't let tax season catch you off guard. A well-organized tax preparation strategy can save your business significant time, money, and stress. Follow these 10 essential steps to prepare your small business for tax season.

1. Organize Financial Records

• Gather all income and expense documents

• Collect receipts, invoices, and bank statements

• Verify all accounting apps are properly synced

• Create digital backups of important documents

2. Review Financial Statements

• Audit income statements and balance sheets

• Verify accuracy of all entries

• Compare against previous year's statements

• Flag any unusual patterns or discrepancies

3. Reconcile Accounts

• Match bank and credit card statements

• Investigate any discrepancies

• Clear pending transactions

• Document any unexplained differences

4. Optimize Expense Categories

• Review expense categorization

• Identify potential tax deductions

• Ensure consistent labeling

• Document any category changes

5. Document Deductible Activities

• Track business mileage with detailed logs

• Calculate home office deductions

• Maintain supporting documentation

• Take photos of workspace if needed

6. Manage Payment Records

• Update contractor information for 1099s

• Review employee payroll accuracy

• Verify tax withholdings

• Confirm year-end bonus calculations

7. Address Outstanding Finances

• Follow up on unpaid invoices

• Review upcoming payments

• Update accounts receivable/payable

8. Plan Strategic Purchases

• Evaluate needed equipment purchases

• Consider timing of major expenses

9. Prepare for Tax Payments

• Organize estimated tax payment records

• Calculate Q4 tax liability

• Build tax payment reserve

• Review tax payment schedule

10. Engage Professional Support

• Schedule tax planning meeting

• Prepare questions for your tax professional

• Gather requested documentation

Take Action Now

Don't wait until the last minute. Start implementing these steps today to ensure a smooth tax season. Need expert guidance? CPM Accounting Services specializes in small business tax preparation and planning. Contact us to schedule a consultation.