How to Prepare Your Books for Tax Season

By Amy Sedatole, CPA — Counting on Amy

Tax season has a way of sneaking up on small business owners. One minute it’s New Year’s, and the next your accountant is asking for reports you haven’t looked at since Q2.

Whether you DIY your finances or work with a bookkeeper, getting organizedbeforetax time can save you money, stress, and costly mistakes.

Here’s how to prepare your books now so tax season doesn’t become panic season.

1. Reconcile All Accounts

Make sure all your bank accounts, credit cards, and payment processors are reconciled through at leastDecember 31st. If your accounts aren’t balanced, your numbers aren’t accurate — and that’s a problem when it’s time to file.

Pro Tip:Look for duplicate transactions, uncategorized expenses, or accounts that haven’t been touched in months. Clean those up now.

2. Review Your Profit & Loss Report (P&L)

Your P&L is the heartbeat of your business. Before you hand anything off to your tax pro, take a look at your final numbers for the year.

Ask yourself:

• Does your revenue look accurate?

• Do any expense categories seem unusually high or low?

• Did you miss recording any income or year-end purchases?

This is your chance to catch mistakesbeforeyour return is filed.

3. Categorize Outstanding Transactions

If your bookkeeping software shows a pile of uncategorized transactions, don’t ignore them. Every untagged charge is a deduction you could miss — or a red flag waiting to be audited.

Take 30 minutes to get everything sorted. Your tax bill will thank you.

4. Prepare 1099s (If You Paid Contractors)

If you paid contractors over $600 in 2025, you’ll need to issue 1099-NEC forms byJanuary 31.

Make sure you:

• Have completed W-9s on file

• Know how they were paid (ACH vs. PayPal/credit card)

• Have the correct totals for payments made

Bonus tip:This is where clean books make 1099 filing incredibly simple.

5. Communicate With Your Tax Preparer

If you’re changing CPAs this year, don’t wait until March to make introductions. Loop in your bookkeeper and tax preparer early so nothing slips through the cracks.

At Counting on Amy, we coordinate directly with your CPA — so when we send off your reports, everything is clean, reconciled, and tax-ready.

Final Thought: You Don’t Have to Do This Alone

If you’re staring at a stack of receipts or a messy QuickBooks file, now is the perfect time to hand things off.

I work with small business owners to get their books clean, organized, and ready — not just for tax season, but all year long.

Let’s make this the last year you scramble at tax time.
Book your free discovery call here

About Amy:
Amy Sedatole is a CPA and founder ofCounting on Amy, where she helps small business owners ditch financial chaos and build clarity, confidence, and tax-ready books — all year long.