It’s Almost Year-End. Time for a Checklist.

Yellow Checklist with Blue Marker Close Up.

Who doesn’t love a good end-of-year checklist? Year-end is coming up and it goes so much smoother if you start preparing early.


1. Prepare 1099’s

1099’s are the task most businesses dread because they are tedious and it’s hard to know if you are issuing them to the right people. Review the IRS requirements for issuing 1099’s here.

You probably remember the $600 minimum, but did you know you need to issue a 1099 to any attorneys you paid? Or for your rent (if paid to the property owner and not a management company)? Or that you don’t have to issue a 1099 for amounts paid to Corporations or LLC’s taxed as a C- or S-Corporation?

Yes, 1099’s are confusing, but do the best you can. If you are unsure if you need to issue a 1099 to a vendor, it won’t hurt to do so. Due to recipients by January 31.

  • Make a list of vendors that need 1099’s.
  • Ensure you have a Tax Identification Number, address, and email for each recipient. If not, send them a W-9 to complete and send back to you.
  • Make sure you know how you are going to file 1099’s. I highly recommend filing them electronically. QuickBooks makes it pretty easy to file. If your software doesn’t have the capability, I personally like

2. Get Ready for W-2’s

Your payroll provider should be preparing W-2’s for you, but make sure they have all the information they need to fill them out correctly. Due to employees by January 31.

  • Any group-term life coverage over $50,000 needs to be reported on the W-2.
  • The total cost of health insurance (not just the employee’s deductions) needs to be reported on the W-2. If your payroll provider handles the benefits as well, they will know this number. If not, someone needs to get it to them.

3. Time for 401(k) Changes

Now is a good time to review your plan and work on making any changes before the new year. Some changes are required to take place at the beginning of the calendar year. Your 401(k) plan provider can tell you which ones. Review your plan to see if you would like to:

  • Add an employer match to your plan.
  • Increase the % of match.
  • Add a profit-sharing contribution.
  • Change vesting schedules or eligibility requirements.

If you have already have profit-sharing included in your 401(k) plan, now is a good time to start thinking about how much you will be able to contribute this year.


4. Clean-Up Your Accounting

If there are areas of your General Ledger that you know are lacking, start cleaning them up now.

  • Review your Chart of Accounts and delete unused accounts. Add additional accounts that would be informative.
  • If general ledger balances are not correct, reclass the significant amounts so that you have good numbers for budgeting purposes.

5. Start Thinking Tax

If you haven’t already looked at your potential tax liability for this year, now is the time to start. The earlier you know what cash you will need for taxes, the better.

  • Roughly forecast the fourth quarter of the year. Come up with a high/low profit scenario.
  • Determine what tax estimates you should make by year-end, based on actual to date and your fourth quarter forecast.
  • Look at any expenses you can accelerate into the current year, or revenue you can defer until next. (Remember, if you are a cash-basis taxpayer, the expenses need to be paid in the current year, not just accrued.)

6. Start Next Year’s Budget

If you start now, you are much more likely to have something to review in January. Budgeting can be a complete nightmare, or it can be a quick afternoon task. It just depends on what information you have from the previous year and your focus on the process.

  • Start with this year’s clean Income Statement. (See above regarding cleaning up your Chart of Accounts.)
  • Transfer those numbers to a spreadsheet and start adding your notes and computations. A percentage annual increase could work for some categories. Other categories may require more specific calculations.
  • After the budget is finalized, make sure it returns to your accounting system so you can compare it throughout the year. If the line items don’t match up with your Chart of Accounts, change your Chart of Accounts or your budget. Don’t spend your year adding up random lines to determine if you are on budget or not!

Need assistance creating a checklist specific to your business? We’re here to help!