End-of-Year Tax Prep

With children back in school and tax extension deadlines approaching, now is an ideal time to meet with your tax preparer. As we enter the final quarter of 2025, it's important to review your finances and ensure you're maximizing all available tax deductions and year-end planning opportunities.

I created a checklist for you to get ready for your end-of year prep! As always, if you need help getting your bookkeeping, up to date, please reach out so we can schedule a time to get your 2025 books to date for your meeting with your tax preparer!

End-of-Year Tax Prep & Deduction Planning Checklist

This checklist is designed for small business owners, therapists, coaches, and solopreneurs who want to maximize deductions and wrap up the year financially clean and organized.

1. Organize and Review Financial Records

Task	Why It Matters
☐ Reconcile all bank, credit card, and payment accounts	Ensures your income and expenses are accurately recorded
☐ Review your profit & loss (P&L) and balance sheet	Identifies areas for deductions or adjustments
☐ Check for missing invoices or uncategorized expenses	Helps avoid missing tax-deductible business costs
☐ Back up digital records and secure paper documents	Keeps you audit-ready and compliant with IRS guidelines

Tip: Create cloud folders labeled by month and category so next year’s records are easier to manage.

2. Maximize Deductible Expenses Before December 31

Expense Type	Example Actions
☐ Office supplies & software	Buy needed items before year-end (e.g., printer ink, Zoom, QuickBooks)
☐ Continuing education	Prepay for eligible trainings or certifications
☐ Professional services	Pay for legal, accounting, or business consulting now
☐ Business equipment	Use the Section 179 deduction for larger purchases (e.g., laptops)
☐ Marketing expenses	Run final campaigns or renew annual subscriptions
☐ Charitable contributions	Make donations to qualified nonprofits for a potential deduction

Tip: Only expenses paid or charged by December 31 count for this tax year.

3. Review and Classify Business-Related Deductions

Task	Considerations
☐ Home office deduction	Measure your work area and calculate based on IRS simplified or actual method
☐ Mileage & auto expenses	Download mileage logs or use apps like MileIQ
☐ Meals & travel	Ensure proper receipts and that the expenses are truly business-related
☐ Health insurance (self-employed)	Check eligibility for the self-employed health insurance deduction
☐ Retirement contributions	Consider contributing to a SEP IRA or solo 401(k) if applicable

Tip from IRS: You can contribute to certain retirement accounts after year-end but still deduct them from the current tax year.

4. Verify Employee & Contractor Records

Task	Why It Matters
☐ Confirm W-9s for all 1099-eligible contractors	Avoid last-minute scrambling in January
☐ Update payroll reports and W-2 info	Ensure accurate end-of-year wage reporting
☐ Schedule bonuses or year-end payouts	These may be deductible if paid before December 31

5. Estimate Tax Liability & Make Final Adjustments

Task	Tool or Tip
☐ Run a year-end income projection	Helps avoid surprises and guides deductions
☐ Use IRS Withholding Estimator or consult a tax pro	Fine-tune withholding or estimated tax payments
☐ Consider deferring income to next year (if cash-based)	Delay sending invoices or collecting payments if it makes sense tax-wise
☐ Prepay expenses if income was unusually high	Level out your tax burden with planned deductions

6. Prep for Tax Filing Season

Task	Why It Matters
☐ Create a folder for 1099s, W-2s, and tax documents	Keeps everything in one place for January-April
☐ Choose or confirm your tax preparer	Secure help early — they get busy fast after Jan. 1
☐ Schedule a January bookkeeping review	Ensures accuracy before you file and reduces CPA fees
☐ Consider a tax planning session	Especially helpful if you’ve had a big income change, new hires, or business structure updates

Final Tip:

Start fresh in January. Set up better tracking systems (apps, spreadsheets, or a bookkeeper) to make next year's tax season less stressful.