Year-End Bookkeeping Checklist for Small Business Owners 2025

If you’re like most small business owners, the end of the year sneaks up fast. Between wrapping up projects, holiday chaos, and prepping for taxes, your bookkeeping may feel like a never-ending chore. But getting your books cleaned up before December 31 can save you hours of stress — and potentially thousands in tax savings.

At Balcony Bookkeeping, I’ve spent over 20 years helping small business owners tame their financial chaos. This guide walks you through exactly what to review, organize, and double-check before year-end so you can enter 2026 with confidence.

Step 1: Review and Reconcile All Accounts

Your first year-end task is ensuring your financial data is accurate. Reconciliation is where you match your books to your bank and credit card statements, a must before tax time.

Here’s what to do:

• Reconcile every bank, credit card, and loan account through December 31, 2025.

• Double-check for duplicate or missing transactions.

• For QuickBooks users, run the Reconciliation Report and the Balance Sheet — they should match your bank statement balances.

💡 Pro Tip: If you find transactions in “Uncategorized Expense,” “Uncategorized Income,” or “Ask My Accountant,” clean those up now. This one habit saves you hours in January.

Step 2: Organize Income and Expense Categories

Accurate categorization helps you claim all deductions and makes tax prep smoother.

Action steps:

1. Review your Chart of Accounts. Remove or merge unused categories.

2. Reclassify any items in “Miscellaneous” or “Other Expense.”

3. Check your income categories — ensure revenue from each service or product line is clearly tracked.

4. Identify deductible expenses you might have missed:

   • Mileage logs (update before December 31)

   • Home office expenses

   • Software subscriptions and online tools

   • Continuing education, certifications, or memberships

💡 QuickBooks Tip: Run a Profit and Loss by Month report to spot unusual spending spikes.

Step 3: Verify Payroll and Contractor Payments

Payroll accuracy is critical heading into January 2026.

Deadlines to know:

• W-2s and 1099-NECs must be sent to employees and contractors by January 31, 2026.

• If you pay contractors, verify those who meet the $600 reporting threshold.

Checklist:

• Confirm employee names, addresses, e-mail addresses, and Social Security Numbers.

• Verify your payroll tax filings are up to date.

• Record any year-end bonuses or fringe benefits (like company vehicles or health insurance contributions).

• Review your state unemployment and workers’ comp reports.

🚨 Note: Payroll companies like Gusto and Intuit often release year-end tax filing reminders by mid-December — keep an eye out for those emails.

Step 4: Review Sales Tax, Loans, and Assets

Sales tax rules continue to evolve for online sellers and service providers, so make sure your filings are accurate.

Tasks to complete:

• Verify that sales tax collected matches what you’ve remitted to the state.

• Update your fixed asset register — add any new equipment purchased in 2025.

• Review depreciation schedules with your tax preparer.

• Confirm the remaining balances on loans, if applicable.

💡 Tip: Many states now require filing even if no sales occurred, so double-check your nexus and filing frequency.

Step 5: Prepare for 2025 Tax Filing

Now that your books are clean, it’s time to prepare your tax package.

Gather these documents:

• December 2025 bank and credit card statements

• Payroll summaries (Form 941, 940, W-3)

• Year-to-date financial reports (P&L, Balance Sheet, General Ledger)

• Loan amortization schedules

• Copies of 1099s and W-2s

Next steps:

• Review your prior-year return for carryover losses or depreciation.

• Meet with your CPA or bookkeeper before February 2026 to discuss potential deductions.

• Estimate your Q4 tax payment, due January 15, 2026

Need a second set of eyes before before tax time?

If you would like a professional peace of mind before filing, Balcony Bookkeeping offers a Year-End QuickBooks Review designed to ensure your books are accurate, reconciled, and tax ready, so you can file confidently.

👉 Schedule your review here or contact Balcony Bookkeeping to get started.

Step 6: Set Your Financial Goals for 2026

Once your 2025 books are wrapped up, use your reports to make smarter decisions for next year.

#Ask yourself:

• Which products or services were most profitable?

• Did my expenses increase faster than my revenue?

• Do I have a 3-month emergency fund for my business?

• Where can I automate (bookkeeping, invoicing, bill pay) to save time?

Consider setting aside time each quarter for a financial review. Small, consistent check-ins beat a stressful year-end scramble.

Key Year-End Deadlines for 2025

Date	Deadline	Applies To
Jan 15, 2026	Q4 Estimated Taxes Due	Self-employed individuals
Jan 31, 2026	W-2s & 1099s to recipients	All employers & contractors
Feb 28, 2026	1099 Paper Filing	If not filed electronically
Apr 15, 2026	2025 Tax Returns Due	Individuals & most corporations

Wrapping It Up

Year-end bookkeeping doesn’t have to be stressful. With a clear checklist, you’ll head into tax season confident your numbers are right — and your stress level is low.

If bookkeeping feels overwhelming, Balcony Bookkeeping can help you stay organized year-round. Whether you need a quick cleanup, ongoing monthly support, or a full QuickBooks overhaul, we’ll help you start 2026 on the right foot.