Year-End Financial Checklist: What to Review Before the Tax Season Begins 

As the year comes to a close, it’s crucial for individuals and businesses to prepare for the upcoming tax season. Taking the time to review and organize your financial records before the new year can help ensure a smooth tax filing process and potentially uncover opportunities for savings. To help you get ready, we’ve compiled a comprehensive year-end financial checklist that covers all the essential tasks to tackle before the tax season begins. 

1. Review Your Financial Statements 

Start by reviewing your financial statements to get a clear picture of your financial position. 

• Income Statement: Verify that all revenue and expense entries are accurate and up-to-date. Check for any discrepancies or missed transactions that could affect your financial results. 
• Balance Sheet: Ensure that your assets, liabilities, and equity are correctly recorded. Confirm that all accounts are reconciled and reflect your current financial situation. 

2. Reconcile Bank Accounts 

Reconcile your bank accounts and credit card statements to ensure that all transactions are accurately recorded. 

• Bank Reconciliation: Compare your bank statements with your accounting records to identify and resolve any discrepancies. This process helps ensure that your financial records are complete and accurate. 
• Account Statements: Review all account statements for any unusual or unrecognized transactions that need to be addressed. 

3. Gather and Organize Receipts and Documentation 

Collect and organize all receipts and documentation related to business expenses, deductions, and credits. 

• Expense Receipts: Ensure you have receipts for all deductible expenses and categorize them properly. This documentation is essential for claiming deductions and

verifying expenses during tax filing. 

• Supporting Documents: Gather documents related to charitable donations, medical expenses, and other tax credits. Ensure that all documentation is complete and organized for easy reference. 

4. Review Tax Deductions and Credits 

Evaluate potential tax deductions and credits to maximize your savings. 

• Deductible Expenses: Identify and review all deductible expenses, including home office expenses, vehicle mileage, and business-related costs. Ensure that you have accurate records and documentation for each deduction. 
• Tax Credits: Explore available tax credits and incentives that you may be eligible for, such as education credits, energy-efficient home improvements, and retirement contributions. 

5. Plan for Retirement Contributions 

Consider making additional contributions to retirement accounts to maximize tax benefits and secure your financial future. 

• Retirement Accounts: Review your contributions to retirement accounts such as IRAs and 401(k)s. If you haven’t reached the annual contribution limits, consider making additional contributions before the year ends. 
• Tax Advantages: Understand the tax advantages of retirement contributions and how they can impact your tax liability. 

6. Evaluate Your Investment Portfolio 

Assess your investment portfolio to make any necessary adjustments before the year ends. 

• Capital Gains and Losses: Review your investment gains and losses to determine if any tax-loss harvesting strategies can be employed to offset capital gains. 
• Investment Review: Evaluate your portfolio’s performance and make adjustments to align with your financial goals and risk tolerance. 

7. Check for Tax Filing Requirements 

Ensure that you understand and meet all tax filing requirements for the upcoming year. 

• Filing Deadlines: Verify the deadlines for filing your personal or business tax returns and any estimated tax payments. Set reminders to avoid penalties and late fees. 
• Required Forms: Identify any forms or documentation needed for tax filing, such as W-2s, 1099s, and business income statements. 

8. Consult with a Tax Professional 

Consider consulting with a tax professional to ensure that you are fully prepared and to receive personalized advice. 

• Tax Planning: A tax professional can help you review your financial situation, identify potential tax-saving opportunities, and address any complex tax issues. 

Conclusion 

By following this year-end financial checklist, you can prepare effectively for the tax season and set yourself up for a smooth and stress-free filing experience. Reviewing your financial statements, reconciling accounts, organizing documentation, and planning for retirement contributions are key steps in ensuring that you maximize your tax savings and maintain financial stability. Don’t forget to consult with a tax professional for expert guidance and to address any specific concerns.