As the calendar year winds down, business owners like you are getting ready for tax season. If your company uses QuickBooks, now is the time to ensure your records are accurate, organized, and ready for tax season.
9 QuickBooks Tips to Prepare for Year-End
A little preparation can help you avoid:
- last-minute stress,
- reduce costly errors, and
- maximize your deductions.
We recommend these key steps to prepare QuickBooks for year-end and streamline your tax filing process.
1. Reconcile Bank and Credit Card Accounts
One of the most essential steps before closing your books is reconciling your bank and credit card statements. This helps ensure that QuickBooks matches your actual accounts, helping you spot missing transactions or errors.
Tip: Compare each transaction in QuickBooks with your bank or credit card statements. If something doesn’t match, investigate and correct it before year-end.
2. Review Accounts Receivable and Payable
Staying on top of receivables and payables helps you manage cash flow while ensuring accurate tax reporting.
Outstanding invoices and unpaid bills can create confusion at tax time. QuickBooks makes it easy to run an A/R Aging Report and A/P Aging Report to see who owes you money and what bills are due. Remember to:
- Follow up on overdue customer invoices, and
- Pay any outstanding vendor bills you plan to deduct this year.
3. Categorize and Clean Up Transactions
Misclassified or uncategorized expenses can lead to lost deductions. QuickBooks allows you to review transactions by category so you can ensure each one is coded correctly.
Action Steps:
- Revisit the “Uncategorized Expenses” or “Ask My Accountant” categories.
- Assign the correct expense categories (e.g., office supplies, advertising, travel).
- Double-check that personal expenses are not mixed into your business books.
4. Verify Payroll Records
Payroll impacts not only your employees but also your taxes. Ensure that your payroll records are complete and accurate, especially regarding withholdings and employer contributions.
In QuickBooks, you can:
- Review year-to-date payroll reports.
- Confirm that W-2 and 1099 information is correct.
- Verify that all payroll taxes have been filed and paid.
5. Check Fixed Assets and Depreciation
If you purchased equipment, vehicles, or other major assets this year, make sure they are recorded in QuickBooks. Properly tracking these items ensures you don’t miss depreciation deductions.
Tip: Consult with your accountant about whether Section 179 or bonus depreciation rules apply to your new assets.
6. Run Key Financial Reports
These reports provide a snapshot of your business’s health and are essential for accurate tax preparation. Before tax season, generate the following QuickBooks reports:
- Profit & Loss Statement: Shows income and expenses for the year.
- Balance Sheet: Summarizes assets, liabilities, and equity.
- Cash Flow Statement: Helps track money moving in and out.
7. Back Up Your QuickBooks Data
Whether you use QuickBooks Online or Desktop, backing up your data ensures you don’t lose valuable financial information. QuickBooks Online backs up automatically, but QuickBooks Desktop users should create a year-end backup file.
8. Prepare for 1099s
If you paid contractors $600 or more this year, you’ll need to file 1099 forms. QuickBooks helps track vendor payments and can even generate 1099s for you.
Action Step: In QuickBooks make sure all contractor information, including names, addresses, and Tax ID numbers, is up to date before January.
9. Consult With Your Accountant
Even the most diligent QuickBooks users benefit from a professional review. An accountant can:
- Double-check your records for accuracy.
- Identify potential tax deductions you may have overlooked.
- Provide guidance on year-end planning strategies.
New in QuickBooks: AI Tools That Make Year-End Prep Easier
Intuit QuickBooks is no longer just bookkeeping software. It now includes powerful AI features that actively clean up your records, flag issues, and streamline tax prep. These new tools, called AI Agents, are designed to take on repetitive accounting tasks and give you clearer financial insights at year-end, such as:
- Allowing you to catch anomalies in reports before they become problems.
- The Bank Feed now suggests categorizations based on your history and helps batch transactions “ready to post.”
- A new Business Feed shows what the AI Agent has done (and what still needs your review).
Tips:
- Opt-in early to use the new AI Agents if your QuickBooks plan allows.
- Train your team (or yourself) to recognize anomaly flags rather than dismissing them.
- Use dashboards and feeds to track which tasks are pending (e.g., missing receipts, uncategorized transactions) and address them before the year closes.
Click the image to download the chart.
Prepare Now – Avoid Stress
Preparing QuickBooks for tax season doesn’t have to be overwhelming. By reconciling accounts, cleaning up transactions, reviewing reports, and checking payroll and 1099 data, you’ll be in a strong position to file confidently.
The key is starting early. A little organization now saves hours of stress later.
Need help getting QuickBooks ready for tax season?
At Steel Ledger Advisors, we work closely with you to help ensure your QuickBooks files are accurate and tax-ready. Our team offers accounting support tailored to businesses like yours. Contact us today to schedule a consultation and ensure a smooth tax filing process.