Tax season stress is manufactured in December or prevented in November. This checklist runs the close in calendar order — what to do in November, December, and January, and why each step is on the list.
A clean year-end is just a December month-end close done thoroughly, plus the annual-only jobs: contractor forms, inventory, and the records that only get created once a year. Businesses that close monthly find December short. Businesses that do not find January long, expensive, and occasionally fictional — reconstructed numbers cost more and defend worse than recorded ones.
Run the checklist in order. The early steps create the information the later steps consume: you cannot send correct 1099s from uncategorized books, and you cannot file from unreconciled accounts.
November is preparation, December is closing, January is forms. Start where the calendar says you are.
A tax return is assembled from five piles: income records (invoices, 1099s received, sales reports), expense records (statements plus receipts), asset records (purchase documents for anything capitalized), payroll records if applicable, and the reconciliations that prove the first four are complete. The checklist above is just a machine for producing those five piles in order. Keep them together, backed up in two places, for at least the period your tax professional advises — seven years is the common conservative practice for business records.
The same checklist compressed into the three working months:
| Month | Focus | Deliverable |
|---|---|---|
| November | W-9 collection; reconcile through October | No missing contractor data; books 10/12 closed |
| December | Categorize, count, document, review AR/AP | Clean full-year draft financials |
| January | Final close; 1099s; package to preparer | Forms filed; return package delivered |
Every item above exists because one of these has bitten a real business:
The $29 Month-End Close Template turns this checklist's core — reconcile, review, close — into a monthly routine with the checklists built in, so next December is an ordinary month. For the full season, the Tax Season Bundle ($199, in the template directory) packages the year-end and tax-prep workbooks together.
Generally, unincorporated contractors you paid $600 or more for services during the year — with exceptions (most corporations, payments made by card, and others). Confirm the current IRS rules each January; the threshold and e-filing requirements have been moving.
Ask in writing before paying whenever possible, and document your requests — you may have backup-withholding obligations if a contractor refuses. This is a 'call your tax professional' situation, not a spreadsheet situation.
The steps are the same; the December review differs. Accrual businesses record received-but-unpaid bills and earned-but-uncollected income at year-end; cash businesses focus on what actually moved. Your books should already know which method you are — the return follows the books.