You cannot fully close a year before it ends. That one fact decides how year-end preparation actually works, and it is where year-end checklists often go wrong.
Final December statements arrive in January, year-end payroll reports follow, and adjusting entries come after that. So the realistic plan is two-phase: do as much preparation as possible before December 31, then close the final month promptly once the year-end documents are in hand. This piece is the checklist for both halves, laid out in the order the calendar actually runs.
Phase One: Before December 31
These are the items you can genuinely finish while the year is still running. Clearing this list in November leaves January with far fewer loose ends to chase.
- Request a Form W-9 from U.S. vendors who may be subject to information reporting, ideally as part of onboarding rather than in January.
- Review the vendor list and identify who is likely to need a 1099, keeping in mind that entity type and payment method both affect whether a form is required.
- Identify fixed assets and large purchases, capturing a description of the asset, the purchase date, the cost, the supporting invoice, and placed-in-service information where available.
- Clean up accounts receivable and accounts payable, flagging old or potentially uncollectible receivables for review with your tax professional.
- Tie loan and credit line balances to the latest available lender statements.
- Raise any open tax questions now, while there is still time to act on the answer inside the tax year.
Gather the Documents Early
Depending on the engagement, your tax professional may request a prior-year return, current-year statements, loan documents, records for major purchases, and payroll summaries. Collect whatever is already available during November and December, then add the final year-end statements as they arrive. Splitting it this way is far easier than assembling everything at once in March.
A Note on 1099 Thresholds
Current as of August 2026. Reconfirm before you file, because this area has been changing. For payments made in 2026, the reporting threshold for Form 1099-NEC increased to $2,000, with inflation adjustments applying after 2026.
On the deadline: the statutory due date for Form 1099-NEC is generally January 31, and when January 31 falls on a weekend or legal holiday it moves to the next business day. That applies this cycle, because January 31, 2027 falls on a Sunday, which pushes the date to Monday, February 1, 2027.
Payment method matters too. Payments made through payment cards or third-party payment networks generally fall under 1099-K reporting by the processor rather than 1099-NEC reporting by you. So payment method can change which payments count toward your own reporting obligation. When you review a vendor’s annual total, separate payments made through cards or third-party payment networks from direct payments you made by check, ACH, or other means, then decide what to file.
Phase Two: Once December Closes
These items depend on documents that do not exist until after the year ends.
- Reconcile December bank, credit-card, and loan statements once they arrive.
- Reconcile payroll for the year, tying payroll expense and payroll liabilities to the year-end payroll reports, including owner wages where applicable, with draws and distributions classified separately.
- Finalize balance sheet accounts, posting the bookkeeping adjustments identified during the close and recording any tax-preparer adjustments once they are provided.
- Produce the year-end financial statements and the supporting reports your tax professional asks for.
The split matters because the first list can be finished inside the tax year and the second cannot. Chasing a W-9 in January from a subcontractor you last saw in July is the classic example. Nobody enjoys that call.
Start the Prep Before Tax Season
Early coordination gives you room to answer questions, track down missing documents, and resolve bookkeeping issues before filing deadlines compress the schedule. Waiting until March means doing all of that inside what is often one of the busiest stretches of the year for whoever is preparing your return.
What Stays With the Tax Professional
Clean books are the handoff, not the whole job. Depreciation elections, tax strategy, and the return itself stay with the person responsible for the tax engagement, and they should. We have written separately about how the bookkeeping and tax roles divide the year. The bookkeeping side hands over clean, organized, complete data; the tax calls get made on top of it. That handoff package is what Tide & Ledger builds on the bookkeeping side, so the tax professional starts with reconciled accounts and organized records instead of a cleanup project.
The work is finite and most of it can be front-loaded. Do the preparation before the year closes, complete the final close promptly in January, and filing season becomes a scheduling problem instead of an emergency.
Frequently Asked Questions
When should I start getting my books ready for year-end?
November and December, not March. The documents and reconciliations do not change, but your ability to handle them calmly does. Preparing in late fall gives both you and your CPA room to fix anything that surfaces before the filing crunch, and it gets you better strategy work because the CPA has time to think rather than just process a queue.
What is the current 1099 reporting threshold?
It is mid-change. For payments made in 2025, reported in early 2026, the long-standing $600 threshold for 1099-NEC applies. Under the One Big Beautiful Bill Act, payments made in 2026, reported in early 2027, move to a $2,000 threshold, indexed for inflation starting in 2027. For the 1099-NEC, the filing deadline is January 31, to both the recipient and the IRS. Confirm the current figure with your CPA, since these rules are still settling.
What does ‘books ready for the CPA’ actually include?
Every account reconciled through year-end, receivables reviewed with uncollectibles flagged, payables current, payroll reconciled including owner compensation, fixed assets and large purchases listed, loans reconciled to statements, owner draws separated from business expenses, and 1099 vendors identified with W-9s collected. Clean, organized, complete data the CPA can work from without redoing it.
What stays the CPA’s job and not the bookkeeper’s?
The depreciation elections, the tax strategy, the entity-level decisions, and the actual filing. The bookkeeper prepares clean, organized, complete books. The CPA makes the tax calls on top of that record. We keep that line bright on purpose: we do not file taxes or make tax decisions, we make sure the numbers your CPA works from are trustworthy.
