1. Review and reconcile financial statements:
At year-end, it's crucial to go through your income statement, balance sheet, and cash flow statement. Ensure they are accurate and balanced, addressing any discrepancies.
2. Assess accounts receivable and payable:
Verify the amounts owed to your business and what your business owes to others. Make necessary adjustments and follow up on outstanding payments.
3. Verify payroll records:
Double-check payroll records, including wages, tax withholdings, and benefits. Ensure accuracy to avoid payroll-related issues.
4. Check for any outstanding invoices or bills:
Review your invoices to see if any clients or vendors owe you money or if you have unpaid bills that need settling.
5. Evaluate your inventory:
Assess your inventory levels and the valuation method used. Make adjustments for any obsolete or unsellable items.
6. Review depreciation and amortization schedules:
Examine the depreciation and amortization of your business assets. Ensure compliance with tax regulations and update schedules as needed.
7. Examine employee benefits and retirement plans:
Ensure all contributions to employee benefit plans and retirement accounts are up to date and meet IRS guidelines.
8. Analyze business expenses and deductions:
Review your expenses for potential deductions. Be thorough in documenting business-related expenses to maximize tax savings.
9. Confirm accurate mileage records for tax-deductible travel:
If your business involves travel, maintain accurate records of mileage and related expenses to claim deductions correctly.
10. Organize tax-related documents and receipts:
Gather all necessary tax documents, receipts, and financial records in an organized manner to facilitate the tax filing process.