What Business Owners Should Do Before Tax Season Starts

Tax season has a habit of sneaking up on even the most organized business owners. The best way to reduce stress? Prepare early. A little proactive cleanup now can save you time, money, and a whole lot of headaches once deadlines start piling up.

Here are a few key steps to focus on before tax season officially begins.

Get Your Bookkeeping Up to Date

Make sure all income and expenses are entered, categorized correctly, and reconciled to your bank and credit card statements. If there are missing transactions or anything unclear, now is the time to address it - before it turns into a bigger issue.

Review Your Financial Reports

Take a look at your profit and loss statement and balance sheet. These reports should tell a clear story about your business. Watch for anything that seems off, such as unusually high expenses, missing income, or negative balances that need clarification.

Verify Contractor and Employee Information

Confirm that names, addresses, and tax details are accurate for contractors and employees. This ensures 1099s and W-2s can be prepared correctly and sent out on time (future-you will be very grateful).

Separate Personal and Business Expenses

If any personal transactions ran through your business accounts, flag them now. Clean separation makes tax preparation smoother and helps avoid unnecessary questions (or awkward explanations!) later.

Organize Your Documents

Gather receipts, invoices, payroll records, and any tax notices in one central place. When your tax preparer asks for documentation, you’ll be ready instead of scrambling.

Review Last Year’s Tax Return

Looking back at last year’s return can highlight deductions, credits, or problem areas to watch for again. It’s one of the easiest ways to avoid repeating mistakes or overlooking opportunities.

Check In With Your Bookkeeper or Tax Professional

A quick planning or review call can uncover potential issues early and make sure you’re on track before deadlines approach. Think of it as preventative care for your finances.

Getting organized ahead of tax season helps you feel confident, prepared, and in control of your business finances.

If you’d like support reviewing your books or getting everything in order before tax season, reach out today. We’re happy to help you get organized and ready without the last-minute stress.