Bookkeeping Cleanup Checklist Before Tax Season

Tax season is not the time to discover that your books are wrong. Most tax problems start months earlier, when bookkeeping issues are ignored or postponed. A proper cleanup before tax season reduces stress, avoids surprises, and creates a smoother path for accurate filing.

This checklist outlines the key bookkeeping cleanup steps business owners should complete before tax season begins.

1) Reconcile All Bank Accounts

Every bank account should be reconciled through the most recent month. Reconciliation confirms that the transactions in your books match actual bank activity.

2) Reconcile Credit Cards and Loans

Credit cards and loans are often overlooked. These balances should tie to statements so liabilities and interest expense are accurate.

3) Review Uncategorized Transactions

Uncategorized items should be resolved before tax filing. Leaving them unresolved increases the risk of misreporting income or expenses.

4) Verify Income Recording

Confirm that income is recorded consistently and completely. Deposits should be reviewed to ensure revenue is not overstated or understated.

5) Separate Personal and Business Transactions

Personal expenses mixed into business accounts should be clearly identified and treated consistently to avoid confusion and tax issues.

6) Review Payroll and Contractor Payments

Payroll entries should be accurate and consistent with payroll reports. Contractor payments should be reviewed to prepare for 1099 reporting.

7) Review the Balance Sheet Carefully

The Balance Sheet reveals problems the Profit and Loss hides. Review assets, liabilities, equity, and retained earnings for unexplained balances.

8) Confirm Books Align With Prior Tax Filings

If prior tax returns have already been filed, the books should align with what was reported. Unexplained differences should be corrected before moving forward.

9) Lock Down Prior Periods

Once cleanup is complete, prior periods should be closed to prevent accidental changes that create discrepancies later.

10) Document What Was Fixed

Cleanup without documentation leads to future confusion. Keep records of what was corrected and why.

Why This Checklist Matters

Tax-ready bookkeeping reduces audit risk, speeds up tax filing, and improves confidence in your numbers. Cleanup before tax season is always easier than cleanup during tax season.

Bookkeeping Cleanup & Catch-Up Services

If your books are not ready for tax season, Polaris Tax & Accounting provides bookkeeping cleanup and catch-up services designed to restore accuracy and clarity.

Related service page: Bookkeeping Cleanup & Catch-Up Services in Plantation, FL (Replace with live permalink.)