Year-End Tax Checklist for Small Businesses

We get it, the end of the year can feel overwhelming when you're juggling everything that comes with running a small business. Between holiday deadlines, year-end inventory, and planning for next year, the last thing you want to think about is tax prep. But here's the thing: a little organization now can save you major headaches (and money) come tax season.

Don't worry, we're not going to throw a mountain of complicated tax jargon at you. Instead, think of this as your friendly roadmap to getting your financial house in order before December 31st rolls around. You've got this, and we're here to help you tackle it step by step.

Get Your Financial Records Straight

Let's start with the foundation, your financial records. If your bookkeeping feels like a messy desk drawer right now, you're not alone. Most small business owners we work with are in the same boat.

First things first: run your profit and loss statement and balance sheet for the year. These reports are like a snapshot of your business's financial health, and you'll need them for tax filing anyway. If you're using accounting software like QuickBooks, this should be pretty straightforward. If you're still using spreadsheets (no judgment here!), now might be a good time to consider upgrading.

Next, reconcile all your accounts. We know this sounds about as fun as watching paint dry, but it's crucial. Check that your loan balances, credit card statements, and vendor accounts match what's showing in your books. Catching discrepancies now is way better than scrambling to explain them to the IRS later.

Don't forget about accounts receivable, those outstanding invoices from customers. Make sure everything is accurate and follow up on any overdue payments. Your cash flow (and your tax situation) will thank you.

Hunt Down Every Deduction You Deserve

Here's where things get exciting, finding all those tax deductions that can actually put money back in your pocket. You've been working hard all year, so let's make sure you're not leaving any savings on the table.

Business Expenses You Might Have Forgotten About:

• Advertising and marketing costs (yes, even that Facebook ad spend counts)

• Employee training and education expenses

• Legal fees related to your business

• Software subscriptions and online tools

• Business meals (50% deductible)

  
  

If you reimburse yourself or employees for business expenses, set up an accountable plan. These IRS-approved reimbursement arrangements help you separate business expenses from personal ones—so you can provide tax-free reimbursements for things like supplies, travel, and even work-from-home costs. It’s a smart, compliant way to keep more money in your business!

For those of you who use your vehicle for business, keep that mileage log handy. The IRS loves documentation, and a detailed logbook tracking your business miles can help you deduct fuel costs, insurance, parking fees, and maintenance. If you haven't been tracking mileage consistently this year (we've all been there), start now for next year.

Take Care of Your Team (and Yourself)

Your employees are one of your biggest assets, and payroll-related expenses are also some of your largest tax deductions. Employee wages, benefits, paid time off, bonuses, and the employment taxes you pay on their behalf, all deductible.

Before year-end, make sure you have updated W-4 forms from anyone whose personal situation changed this year. New baby? Got married? Bought a house? These life changes affect how much tax gets withheld from their paychecks, and having current forms helps everyone avoid surprises.

If you work with independent contractors or freelancers, remember that you'll need to send a Form 1099-NEC to anyone you paid more than $600 during the year. Start gathering their information now, you'll need their legal name, address, and tax ID number.

Document Your Business Assets

All those business purchases you made this year? They need proper documentation. Keep invoices and receipts for any equipment, furniture, computers, or other assets you bought. If you sold any business assets during the year, document the sales price and date.

This is also a good time to review your depreciation schedule with your accountant. Some assets might qualify for bonus depreciation, which could give you a significant tax break this year instead of spreading it out over several years.

Separate Business from Personal (Yes, Really)

We know it's tempting to put that occasional business lunch on your personal credit card or pay for office supplies with cash from your wallet. But mixing business and personal expenses makes tax prep way more complicated than it needs to be.

Take some time to go through your personal accounts and identify any business expenses you might have paid for personally. Document these and reimburse yourself from the business account if possible. Your future self (and your accountant) will appreciate the clean separation.

For business loans and credit cards, separate the principal payments from interest payments in your records. Only the interest is tax-deductible, so this distinction matters come tax time.

Don't Go It Alone: Get Professional Help

Here's the truth: tax planning isn't just about filing your return in April. The best strategies happen before the year ends, when you still have time to make moves that can lower your tax bill.

If you haven't already, now's the time to schedule a meeting with a tax professional. Not next month, not in January: now, while there's still time to implement year-end tax strategies. A good accountant can help you evaluate whether changing your business structure or setting up a retirement plan could save you money.

Don't assume your accountant will automatically spot every opportunity to reduce your taxes. Come to the meeting prepared with questions about your specific situation. Are there equipment purchases that make sense before year-end? Should you accelerate or defer certain income? These conversations can literally save you thousands.

Make Sure You're Compliant

Nobody wants a letter from the IRS, so let's make sure all your ducks are in a row. Double-check that you've filed all required returns and paid all necessary taxes throughout the year: federal income tax, state taxes, sales tax, and payroll taxes.

If you're behind on any quarterly payments or filings, get caught up before December 31st. Late fees and penalties add up quickly and eat into your bottom line.

One More Thing to Keep in Mind

The new 23% Small Business Deduction (Section 199A) has now been made permanent, rather than expiring at the end of 2025. This enhanced deduction continues to be a game-changer for many small businesses, allowing eligible owners of pass-through entities to potentially save thousands in taxes each year. While future tax law is never guaranteed, current rules give us a longer runway for planning, which means it’s more important than ever to structure your income, compensation, and entity type in a way that fully leverages this permanent 23% deduction.

You've Got This (But You Don't Have to Do It Alone)

Look, we know this list might feel overwhelming at first glance. But remember: you don't have to tackle everything at once. Pick one section and start there. Maybe spend an hour this week organizing receipts, then another hour next week reconciling accounts. Small, consistent steps add up to big results.

The goal isn't perfection; it's preparation. Every step you take now makes tax season less stressful and potentially saves you money. And honestly? Most of this stuff becomes second nature once you get into a rhythm.

Ready to tackle your year-end tax prep but want some expert guidance? We'd love to help. At JOLT Strategies, we specialize in helping small businesses just like yours navigate tax planning and compliance without the stress and confusion.

Why not schedule a complimentary tax review with our team? We'll look at your specific situation, identify opportunities you might have missed, and create a game plan that makes sense for your business. No pressure, no complicated jargon, just straight talk about how to keep more of your hard-earned money.

Schedule your free consultation today. Because when it comes to taxes, a little professional guidance can go a long way toward giving you peace of mind and keeping more money in your pocket.