--- title: "Year-End Bookkeeping Close: Steps Before Tax Time | MCC" description: "A sequence of year-end bookkeeping steps: final reconciliations, 1099 prep, inventory, asset review and what to hand your tax preparer." url: "https://mcc-solutionsnj.com/bookkeeping/guides/year-end-bookkeeping-close-steps" --- Bookkeeping guide · Updated October 12, 2026 # Year-End Bookkeeping Close: Steps Before Tax Time Year-end is when loose ends become expensive. A clear sequence of steps, started before the year actually ends, gives your tax preparer clean numbers and saves time and fees. By [Matthew Coleman](/about), MCC Solutions **Quick answer.** In the last weeks of the year, review your profit and year-to-date numbers and talk to your tax preparer about planning. Decisions like equipment purchases, retirement contributions and timing of income are easier before the year closes, and rules change, so ask what applies now. Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [Trial balance explained](/bookkeeping/guides/trial-balance-explained) · [Owner contribution or loan](/bookkeeping/guides/owner-equity-and-capital-contributions) · [Closing entries and retained earnings](/bookkeeping/guides/closing-entries-and-retained-earnings) **Free tools:** [Net profit margin calculator](/bookkeeping/net-profit-margin-calculator) · [Early payment discount calculator](/bookkeeping/early-payment-discount-calculator) Prefer a file to work in? The [Month-End Close Workbook](/toolkits/month-end-close-workbook) runs the whole close in Excel and tells you when a reconciliation does not tie. [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) ## Before December ends In the last weeks of the year, review your profit and year-to-date numbers and talk to your tax preparer about planning. Decisions like equipment purchases, retirement contributions and timing of income are easier to make before the year closes. Rules change, so ask what applies now. Also collect W-9 forms for contractors you paid and confirm addresses, so 1099 forms are not delayed. ## Reconcile everything through year end Reconcile every bank, credit card, loan and merchant account through the last day. Get the December statements as soon as they are available. Clear any items in uncategorized, ask my accountant or suspense accounts. Check that payroll reports agree with payroll tax filings, and that sales tax collected matches what you filed or will file. ## Review receivables, payables and inventory Look at old receivables and decide whether any should be written off. Review payables for bills dated this year but not yet entered. Complete the year-end inventory count and adjust to the actual value. These are the numbers that most often differ between a rough set of books and a tax-ready set. ## Want us to handle it? We close the year with you: accounts reconciled, 1099s sorted, and books your tax preparer can use. **Price:** Free review of your books first, then a written quote before any work starts. [Get a free review and quote](/bookkeeping/#interest) [1099 and year-end cleanup](/bookkeeping/1099-and-year-end-books-cleanup) ## Fixed assets, loans and equity Update the fixed asset register with additions and disposals, record depreciation, and match loan balances to lender year-end statements. Ask the lender for the interest paid total. Review owner draws, contributions and any owner loans, and make sure they are recorded in the right accounts. Move personal items out of the business books before the tax preparer sees them. ## Information returns and the handoff Prepare contractor information returns according to the current IRS instructions and deadlines, and check W-2 information with your payroll provider. Do not rely on memory for due dates, since they are set by the agencies. Then assemble a package for your tax preparer: the year-end profit and loss, balance sheet, general ledger, asset list, loan statements, payroll summaries and a short note on unusual events. Lock the year in your software so no one edits it by accident. If a correction is needed later, make it with a dated adjusting entry. ## Common year-end surprises Owners are often caught out by a few items: a contractor who never returned a W-9, a personal credit card used for business with no receipts, a loan payment coded entirely to expense, and deposits that are sitting in uncategorized income. Give yourself time in January to chase these, since the fixes depend on other people responding. Starting in early December rather than late January makes the whole process calmer. A final tip is to ask your tax preparer for a document checklist in November. Each preparer wants slightly different items, and learning their list early lets you gather loan statements, asset invoices and payroll summaries while they are still easy to find. ## Common questions **When should I start year-end work?** Late in the year, with planning discussions in the final quarter and reconciling in January. **What if I find mistakes after closing?** Make correcting entries and tell your tax preparer, as an amended filing may be needed. **Do I need to close the books in software?** Software closes automatically by rolling profit into retained earnings. Setting a closing date helps prevent edits. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) [### QuickBooks Online Monthly bookkeeping, cleanup and reconciliation in QuickBooks Online for New Jersey small businesses. Your account stays in your name. QuickBooks →](/bookkeeping/software/quickbooks-online)[### Xero Bookkeeping and reconciliation in Xero for New Jersey small businesses, including cleanup and moving from spreadsheets or another program. Xero →](/bookkeeping/software/xero)[### Gusto and payroll software Payroll software for New Jersey small employers: what to set up, how payroll flows into your books, and the NJ filings that follow every payroll. Payroll →](/bookkeeping/software/gusto-payroll) More guides - [What Is an Audit Trail in Bookkeeping?](/bookkeeping/guides/audit-trail-in-bookkeeping) - [Simple Internal Controls for Small Business Money](/bookkeeping/guides/internal-controls-for-small-business-money) - [Employee Fraud Red Flags for Small Business Owners](/bookkeeping/guides/employee-fraud-red-flags-in-small-business) - [Common Bookkeeping Mistakes and How to Fix Them](/bookkeeping/guides/common-bookkeeping-mistakes-and-how-to-fix-them) Free tool - [Bookkeeping health check](/bookkeeping/health-check) [All guides](/bookkeeping/guides) Reach small business owners, freelancers and bookkeepers who read this guide: [advertise here](/advertise#bookkeeping). Do it yourself ### Month-End Close Workbook A real month-end close in one Excel file. It tells you when a rec does not tie, which variances still need an answer, and when the period is ready to lock. [See what's inside ($19)](/toolkits/month-end-close-workbook)14-day full refund ## Rather have us keep the books? Ask for a quote. [Get a Quote](/bookkeeping/#interest)[Call (908) 444-6373](tel:+19084446373)