Your Tax Prep Checklist: 10 Things to Do Before the IRS Comes Knocking

Taxes are never fun, but for small business owners, being unprepared can turn them into a nightmare. Late filings, missing receipts, and disorganized books all make the IRS more interested in your business than you want them to be. That is why having a clear plan matters. Here is a practical small business tax preparation checklist to help you stay audit ready and stress free.

🔴 1️⃣ Gather All Income Records

The IRS wants to see every dollar that came into your business. Forgetting even small amounts can create big problems.

Checklist Table: Income Records

🟢 2️⃣ Collect Expense Documentation

Your deductions only count if you have proof. Keep receipts and digital copies organized.

Checklist Table: Expense Categories

🔵 3️⃣ Reconcile Bank and Credit Card Accounts

Make sure your bank statements match your bookkeeping. If they do not align, the IRS will ask why.

Checklist Table: Reconciliation Steps

🟣 4️⃣ Organize Payroll Records

If you pay employees or contractors, keep payroll reports, W2s, and 1099s in order.

Checklist Table: Payroll Records

🟡 5️⃣ Review Quarterly Estimated Tax Payments

Small businesses are expected to pay estimated taxes. Missing these can lead to penalties.

Checklist Table: Estimated Payments

🟠 6️⃣ Track Business Mileage

Mileage is one of the most commonly missed deductions. You need a clear log.

Checklist Table: Mileage Tracking

🔴 7️⃣ Review Asset Purchases and Depreciation

Large purchases like equipment or vehicles can be written off or depreciated.

Checklist Table: Asset Review

🟢 8️⃣ Double Check Tax Credits

Credits can save you thousands, but many small business owners miss them.

Checklist Table: Common Tax Credits

🔵 9️⃣ Prepare Your Financial Statements

Your P&L, balance sheet, and cash flow statement are the backbone of tax prep.

Checklist Table: Financial Reports

🟣 🔟 Schedule a Final Review with Your Accountant

Even if you prepare everything yourself, a professional review can save you from costly mistakes.

Checklist Table: Accountant Review Items

The Bottom Line

Tax season does not have to be a headache. By following this small business tax preparation checklist, you will reduce stress, avoid penalties, and be ready if the IRS ever comes knocking.

👉 Subscribe to Tea on the Ledger for more practical strategies and financial tips that help you stay audit proof and confident year round.