Is Your Business Ready for Tax Season? Here’s How to Get Your Books in Shape

Tax season has a way of sneaking up on busy business owners. Between serving clients, managing operations, and juggling day to day responsibilities, it’s easy for bookkeeping to fall to the bottom of the priority list. But the truth is simple: clean, accurate books are the foundation of a smooth and stress free tax season.

Whether you’ve been on top of your numbers all year or you’re catching up at the last minute, here’s how to set your business up for success and avoid costly surprises.

1. Reconcile Everything? Yes, Everything

Bank accounts. Credit cards. Loans. Payment processors. If it moves money, reconcile it.

Reconciliation ensures that what’s in your accounting software actually matches what’s happening in your accounts. Even small discrepancies can lead to inaccurate tax filings and unwanted IRS attention.

Tip: Don’t forget PayPal, Venmo, merchant accounts, and any financing tools you’ve used.

2. Clean Up Old Transactions

It’s common for uncategorized or old transactions to pile up throughout the year. Before tax season hits, review all outstanding items and place them where they belong.

Look for:

• Duplicate entries

• Uncategorized expenses

• Misclassified income

• Personal vs. business charges

These seemingly small issues can dramatically affect your tax deductions and financial statements.

3. Gather All Receipts and Documentation

The IRS doesn’t just want to see numbers, they want backup.

Make sure you have support for:

• Equipment purchases

• Travel and meals

• Subscriptions and software

• Contractor payments

• Inventory or supply purchases

Digital receipts are perfectly acceptable, so long as they’re stored in an organized, accessible way.

4. Review Your Profit & Loss and Balance Sheet

These two reports tell the full financial story of your business.

A tax ready P&L should clearly show:

• Revenue

• Cost of goods sold (if applicable)

• Operating expenses

• Net income

Meanwhile, your balance sheet should properly reflect:

• Assets

• Liabilities

• Loans

• Owner contributions and draws

If something looks "off," it probably is; better to fix it now than during tax prep.

5. Check Payroll Compliance

Payroll issues can cause major headaches and penalties.

Confirm that:

• All payroll taxes have been filed

• W2s and 1099s are prepared

• Employee and contractor information is accurate

If you paid any contractor more than $600 this year, a 1099NEC may be required.

6. Know Your Deductible Opportunities

Many business owners leave money on the table simply because their books aren’t clear enough for their accountant to spot deductions.

Well organized books help you maximize deductions for:

• Home office

• Business mileage

• Software

• Marketing

• Office supplies

• Professional services

• Equipment depreciation

Clean books = lower tax bill.

7. Work With a Professional Before It’s an Emergency

The best time to bring in a bookkeeper is before the panic hits.

At PBS Back Office, we specialize in:

• Bookkeeping cleanups

• Monthly maintenance

• Payroll

• Financial reporting

• Tax season preparation

Our goal is to give business owners clarity and confidence, not just at tax time, but all year long.

Final Thoughts

Tax season doesn’t have to be overwhelming. With organized books, accurate reports, and the right support, it becomes just another part of running your business, not a crisis.

If your books need a cleanup, a review, or a fresh start, PBS Back Office is here to help you walk into tax season prepared and stress free.