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Year-end bookkeeping checklist: close your 2026 books before tax season

Six areas to review before December 31, so your 2026 tax return starts from clean, reconciled numbers instead of a January scramble.

Business Bookkeeping2 min read

The last weeks of the year are the best time to clean up your books. Every question you answer now is one less delay when your tax return is prepared, and a cleaner start for 2027.

1. Reconcile every account

  • Reconcile each bank account, credit card and loan against its statement, through December 31.
  • Investigate items that have been pending for months: old checks that never cleared, duplicate entries, deposits that never arrived.
  • Split loan payments into principal and interest, and confirm the balance matches the lender’s statement.

2. Review income and receivables

  • Match your recorded sales to your deposits. Payment platforms such as Stripe, Square and PayPal often deposit the net amount, so record the full sale and the fees separately.
  • Follow up on unpaid invoices, and decide with your accountant how to handle the ones you will not collect.

3. Clean up expenses

  • Categorize every transaction and empty the “uncategorized” and “ask my accountant” accounts.
  • Keep receipts for larger purchases attached to their transactions.
  • Record personal expenses paid from business accounts as owner draws, not business expenses.

4. Get ready for 1099s and W-2s

  • Collect a Form W-9 from every contractor you paid in 2026.
  • For payments made in 2026, a Form 1099-NEC is generally required when you pay a contractor $2,000 or more during the year. The limit was $600 until 2025. Payments by card or through apps such as PayPal are reported by the payment company instead.
  • 1099-NEC and W-2 forms are due February 1, 2027, because January 31 falls on a Sunday.

5. Record assets and inventory

  • Record equipment, vehicles and computers bought this year as assets, with the purchase date and cost, so your tax preparer can calculate depreciation.
  • If you carry inventory, count it on the last day of the year.

6. Close the year

  • Run the year-end Profit and Loss, Balance Sheet and Statement of Cash Flows, and compare them with last year.
  • After your review, set a closing date in QuickBooks Online so no one changes 2026 by accident.

Want help closing your 2026 books? BF Group keeps books in QuickBooks Online every month and prepares year-end reports ready for your tax preparer.