The year-end books checklist: what to hand your CPA

Tax season is only stressful when the year behind you is a mystery. If your accounts are reconciled and your documents are in one place by mid-January, the hand-off to your CPA is a folder and a phone call, not a crisis. Here is what to gather, what to reconcile, and when.

Key takeaways

Your CPA needs about a dozen documents. Collect them as they arrive, not in April.
Reconcile every account through December 31 before anything goes to your CPA.
Start in October. Two hours a month beats twenty hours in one weekend.
Whoever files your 1099s for you needs the contractor totals in January, earlier than most owners expect.

The documents your CPA will ask for

Keep one folder, physical or digital, and drop these in as they show up. Most arrive in January.

Bank and credit card statementsEvery business account, January through December. Your CPA uses the December statements to verify ending balances.

Loan statementsYear-end balance and total interest paid for every business loan, line of credit, and financed vehicle or equipment.

Payroll reportsAnnual payroll summary and the year-end forms your payroll platform produces, if you have employees.

1099s you received1099-NEC and 1099-K forms from clients and payment processors. They should match the income already in your books.

1099s issued to contractorsCopies from whoever files them for you, plus the payment records that back them up.

Asset purchasesInvoices for equipment, vehicles, computers, or furniture bought this year. Your CPA decides how each is treated; the invoice is what makes that possible.

Mileage logTotal business miles for the year, with dates and purposes. A mileage app export counts.

Home office numbersSquare footage of the office and the home, plus annual rent or mortgage interest, utilities, and insurance.

Health insurance premiumsThe annual total, if you pay them as an owner. Your CPA will know what to do with the number; they just need to have it.

Tax payments made during the yearDates and amounts of any payments you made to a tax agency. Missing one causes mismatched notices later.

Last year's returnIf you are working with a new CPA, the prior-year return answers half their questions before they ask.

What to reconcile before your CPA starts

Documents prove the numbers; reconciliation proves the books. Before your CPA sees anything:

Every bank and credit card account reconciled through December 31. The balance in your books matches the statement to the penny.
Loan balances in your books match the lender's year-end statement, with payments split correctly between principal and interest.
Payroll in the books matches the payroll platform's annual summary. If your P&L says one wage number and the payroll reports say another, that gets sorted now.
Accounts receivable and payable cleaned up. Invoices that will never be paid are written off in the books; unpaid bills are actually recorded.
Owner draws and contributions categorized as such, not as expenses or income.

The timeline

October

Reconcile everything through September. Look at your year-to-date profit. If the number is bigger or smaller than you expected, this is the moment to tell your CPA, while there are still months left in the year. A conversation in October is worth ten in April.

November

Collect a W-9 from every contractor you have paid this year, while they still return your calls. Review your fixed assets: anything bought, sold, or scrapped gets documented now.

December

Any year-end purchases or contributions you are considering are a conversation with your CPA, not a decision made on a rumor. Reconcile through November so only one month remains.

January

Reconcile December the first week the statements arrive. Get contractor payment totals to whoever files your 1099s; that deadline lands before most people have thought about the year at all. Close the year.

February

Send the complete package to your CPA: full-year P&L, balance sheet, general ledger, and the document folder. Early packages get unhurried attention.

March and April

Answer your CPA's questions from the books, not from memory. If they need something reconstructed, the reconciliation you did in January is what makes the answer quick.

From our desk

The single biggest cause of expensive tax prep bills is not complexity, it is reconstruction. When a CPA has to rebuild a year of books from bank statements before they can start, you pay accountant rates for bookkeeper work. Clean books all year are cheaper than clean-up in April.

This guide is general information for small business owners. It is not tax, legal or accounting advice for your situation. Talk to your CPA before acting on anything tax related. JMH keeps books and does no tax work.

All resources

The year-end books checklist: what to hand your CPA.