Small Business Year-End Checklist: What to Do Before December 31st
If you’re a business owner, the end of the year comes fast — and December 31st is an important tax deadline many people overlook. But here’s the good news:
A few simple steps now can help you save money, stay organized, and walk into tax season feeling calm and prepared.
No overwhelm. No complicated systems.
Just a straightforward checklist to help you finish the year strong.
Let’s break down what every small business owner should do before December 31st.
1. Review Your Income & Expenses (Your Year-End Snapshot)
Before you think about taxes or deductions, start with your numbers.
Getting the basics organized will make everything else easier.
✔️ Update your bookkeeping
Make sure all income and expenses are entered and your accounts match your bank statements.
Clean books = accurate taxes and fewer surprises.
✔️ Categorize expenses correctly
Incorrect categories can cause you to lose deductions.
Double-check common areas like:
Subscriptions
Software
Business meals
Supplies
Marketing
Contractor payments
✔️ Run and review your Profit & Loss statement
A P&L shows:
What you earned
What you spent
What your real profit is
Where money is leaking
Sometimes one missed expense can change your entire tax picture.
2. Consider Smart Year-End Business Purchases
If your business needs something — and you use cash-basis accounting — December might be a good month to make those purchases.
✔️ Equipment and technology (Section 179 + bonus depreciation)
You may qualify to deduct the full cost of certain equipment purchased before December 31st. This includes:
Laptops and computers
Office equipment
Cameras, microphones, or lighting
Tools or machinery
Software subscriptions
Only buy what your business truly needs.
SEO phrase included: “deductible business equipment purchases before year-end”
✔️ Stock up on supplies
Printer ink, packaging materials, business tools — these small purchases are “ordinary and necessary” deductions that many business owners forget to buy until tax season.
✔️ Prepay certain expenses (if you’re cash-basis)
Some owners choose to prepay:
January rent
Insurance
Utilities
Vendor services
Prepaying can reduce taxable income this year while giving you a head start for the new year.
3. Track Mileage & Other Commonly Missed Deductions
Mileage is one of the most overlooked deductions — especially for service-based industries and mobile businesses.
✔️ Catch up on your mileage log
Business mileage includes:
Driving to clients
Meetings
Picking up supplies
Conferences
Business errands
Whether you use an app or a spreadsheet, get your mileage updated before the year ends.
Other missed deductions:
Online tools (Zoom, Canva, software)
Professional memberships
Education, courses, seminars
Marketing and ads
Website hosting or domain fees
These small items add up quickly.
4. Get Your Documents and Records Organized
Tax season feels stressful when documents are all over the place.
A little preparation now goes a long way.
✔️ Gather your receipts and statements
It doesn’t matter whether you keep digital or paper.
What matters is knowing where they are.
✔️ Collect W-9 forms from contractors
If you paid a contractor $600 or more, you must issue a 1099-NEC in January.
You can’t do that without their W-9.
This is one of the biggest year-end mistakes business owners make.
5. Review Payroll, Owner Payments, or Draws
✔️ If you have employees
Review payroll reports for accuracy and confirm tax payments are up to date.
✔️ If you’re an S-Corp owner
Make sure your reasonable compensation (your W-2 salary) is fully paid before year-end.
This is a major compliance issue the IRS focuses on.
✔️ If you’re a sole proprietor or single-member LLC
Look over your owner draws and make sure they’re properly recorded.
6. Prepare for Your Final Quarterly Tax Payment
Your final estimated tax payment is due January 15.
Review:
What you earned in Q4
What you’ve already paid
Whether you need to adjust your final payment
This helps avoid underpayment penalties and smooths out your refund or balance due.
7. Reflect on Your Business Goals Before the New Year
This part is simple, but powerful.
Ask yourself:
What worked really well this year?
What needs adjusting?
What drained your energy or revenue?
What one thing can you improve going into 2026?
Small edits now create big results later.
Year-end planning doesn’t have to be stressful.
When you take these simple steps before December 31st, you’re setting yourself up for:
smoother tax filing
clearer financial records
fewer surprises
and a stronger start to the new year
And if you need a simple way to track income, expenses, and receipts in one place, my Business Financial Tracker can help you stay organized all year long.
You deserve to walk into the new year confident and prepared.
FAQ
What business expenses should I pay before December 31?
Common year-end expenses include supplies, software, equipment, prepaid rent, insurance, and vendor services — especially if you’re a cash-basis taxpayer.
Do equipment purchases qualify for a deduction?
Many do. Under Section 179 or bonus depreciation, you may be able to deduct the full cost of equipment purchased before year-end.
What documents should I have ready for tax season?
Receipts, mileage logs, bank statements, P&Ls, and contractor W-9s. Organizing them now makes tax filing easier.
Do I need to send 1099s to contractors?
If you paid a contractor $600 or more, you must issue a 1099-NEC by January 31 — and you need their W-9 first.
Should I prepay expenses before the year ends?
It depends. Cash-basis businesses can sometimes reduce taxable income by prepaying certain expenses due early next year.
About the Author:
I’m Coach Ktasha (Tasha), a tax and business consultant dedicated to helping individuals and entrepreneurs navigate taxes, maximize deductions, and build strong financial foundations. My goal is to make tax season stress-free and provide you with the knowledge to make smart money moves all year long.
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