Year-end cleanup
Get your books ready before the year ends
The easiest time to fix your books is before the tax-filing rush. This is the checklist I use, plain and in order, and I can do the work with you if you would rather not.
The year-end checklist
Work through these in order. Each step makes the next one easier, and everything here is something you can start this week.
- Reconcile every account. Bank, credit card, loan and payment-processor accounts, matched to statements through the most recent month. Unreconciled accounts are a common source of year-end surprises.
- Collect W-9s from contractors. Anyone you paid as a contractor this year: name, address and tax ID on file before the filing season starts.
- Check how you classify people. Review who is treated as a contractor and who as an employee, especially under New Jersey's ABC test.
- Reconcile payroll. Match payroll reports to the books and to your quarterly filings, so the totals on W-2s will agree with what you recorded.
- Clean up uncategorized and duplicate items. Clear the 'ask my accountant' account, fix duplicates and move owner deposits and draws to the right place.
- Review what customers owe you and what you owe. Old invoices, unpaid bills and customer deposits, so the year-end balance sheet is believable.
- Count inventory, if you carry it. A count and a written valuation method at year end, kept with your records.
- Gather receipts and documents. Large purchases, loan paperwork, vehicle mileage and anything your CPA is likely to ask about.
- Run the year-end reports. Profit and loss, balance sheet and a transactions listing, then send them to your CPA with a short note on anything unusual.
Dates and rules change, so check the current deadlines for this tax year on the tax deadlines page and the tax deadline calendar, and confirm with the IRS and the NJ Division of Taxation.
Contractors and the new New Jersey rule
New Jersey's ABC test for independent contractors took effect October 1. Before you file 1099s, it is worth confirming that the people you treat as contractors really are. Read what the rule says and a short checklist for what to do now.
Want help getting it done?
I can catch up and clean the books, reconcile the accounts and hand your CPA a clean set of reports. You get a written scope and a price before any work starts, or a plain answer if I am not the right fit.
MCC Solutions is not a CPA firm. Tax returns, audits and legal questions stay with your CPA or attorney.
Common questions
When are W-2s and 1099-NECs due?
Both are generally due to the people you pay and to the government in late January. When a date falls on a weekend or holiday it moves to the next business day, so confirm the exact date for this year with the IRS and, for New Jersey, the NJ Division of Taxation.
Why collect W-9s before December ends?
A W-9 gives you the name, address and tax ID you need to file a 1099 for a contractor. Getting them while the work is fresh is far easier than chasing people in January.
Is every person I pay a 1099 contractor?
No. Whether someone is a contractor or an employee depends on the facts, and New Jersey applies its own test. Read our guide on the state's ABC test, and ask your CPA or attorney about your specific situation.
Can you prepare my tax return?
No. MCC Solutions is not a CPA firm. We get your books accurate and organized so your CPA or tax preparer can file faster, with fewer questions.
What if my books are months behind?
That is common. Catch-up work starts with your bank and card statements and works forward, so the books are usable again. Start with the free health check to see where things stand.