A step-by-step checklist to get your financials ready for your CPA — covering expense categories, 1099s, and year-end close.
Tax season does not have to be a crisis. For founders whose books are maintained properly throughout the year, it is just another week. For everyone else, it is a stressful scramble of hunting down receipts, reconstructing months of transactions, and hoping the numbers add up before the deadline.
This guide gives you a complete checklist for getting your books tax-ready — and explains how Startup Books keeps your records organized all year long so that when April arrives, you are already prepared.
Why Your Books Matter at Tax Time
Your tax return is only as accurate as your financial records. Every deduction you claim needs to be documented. Every revenue figure needs to match your records. And if the IRS ever audits you, your bookkeeping records are your primary defense.
Beyond compliance, good records help your CPA work more efficiently — which means lower accounting fees and fewer back-and-forth questions during the most expensive time of year.
The Year-End Bookkeeping Checklist
1. Reconcile All Bank and Credit Card Accounts
Make sure every bank account and credit card statement has been reconciled through December 31st. Every transaction should be accounted for and categorized correctly. Any discrepancies need to be investigated and resolved.
2. Categorize All Transactions
Every transaction in your accounting software should have the correct expense category. Common categories include payroll, rent, software subscriptions, marketing, travel, meals, contractor payments, and professional services. Proper categorization ensures you capture every deductible expense.
3. Review Accounts Receivable
Pull a list of all outstanding invoices. Are there any customers who still owe you money from the prior year? These may affect your reported income depending on whether you are on cash or accrual accounting. Discuss with your CPA how to handle any significant outstanding receivables.
4. Review Accounts Payable
Similarly, review any bills you owe that have not been paid. These outstanding payables may be deductible in the current year or the next, depending on your accounting method.
5. Prepare 1099s for Contractors
If you paid any US-based contractors (freelancers, consultants, service providers) more than $600 during the year, you are required to issue them a Form 1099-NEC by January 31st. Make sure you have collected W-9 forms from all contractors and that your records accurately reflect how much you paid each one.
6. Reconcile Payroll Records
If you have employees, confirm that your payroll records match your books. Your W-2s for employees need to match the wages recorded in your accounting software.
7. Document and File All Receipts
The IRS requires documentation for business expense deductions. This means receipts or invoices for expenses, especially for meals, travel, and entertainment. Make sure your records are organized and accessible — not buried in an email inbox.
8. Review Fixed Assets and Depreciation
Did you purchase any equipment, computers, or other fixed assets during the year? These may be depreciated over several years rather than expensed immediately. Your bookkeeper and CPA should review any significant asset purchases to ensure they are treated correctly.
9. Verify Loan Balances
If you have business loans, confirm that the balances in your accounting software match the actual loan balances from your lender statements. Interest paid on business loans is generally deductible.
10. Generate Your Year-End Financial Reports
At year-end, you need a complete Profit & Loss statement and Balance Sheet for the full year. These are the primary documents your CPA needs to prepare your tax return. Make sure they are accurate, reconciled, and clearly formatted.
Key Tax Deadlines for US Startups
See our guide for what to send your CPA at year-end.
| Deadline | What Is Due | Who It Applies To |
| January 31 | Form 1099-NEC for contractors | Businesses paying freelancers $600+ |
| March 15 | S-Corp & Partnership tax returns | S-Corps, LLCs taxed as partnerships |
| April 15 | C-Corp & individual tax returns | C-Corps, sole proprietors, LLCs |
| Quarterly | Estimated tax payments | Self-employed founders, sole proprietors |
How Startup Books Keeps You Tax-Ready Year-Round
At Startup Books, tax readiness is not something we prepare for in January — it is built into how we maintain your books every single month. Here is what that looks like in practice:
- Every transaction is categorized using IRS-standard expense categories
- Contractor payments are tracked throughout the year so 1099s are ready to go in January
- Bank and credit card accounts are reconciled every month — no year-end scramble
- Your year-end financial package includes a full P&L, Balance Sheet, and supporting schedules formatted for your CPA
- We do not file tax returns, but we work closely with your tax preparer to make the process as smooth as possible
| Work With Startup Books
Get your books tax-ready before the deadline. Start at startupbooksusa.com/contact-us |
Get your books tax-ready before the deadline.
Final Takeaway: Explore more bookkeeping guides for US startups.
Tax season is not the problem — unprepared books are the problem. If your books are clean, reconciled, and organized throughout the year, handing off to your CPA in the spring is a simple, low-stress process. The goal is to make tax season feel like any other week.