The Taxpayer Times

Every year around this time, businesses rush to wrap up projects, handle holiday sales, close the books, and prepare for the new year. And yet, something important gets pushed aside:

Getting ready for tax season.

Unlike individuals, who often only need W-2s and a few forms, business tax returns require real preparation – documents, receipts, reconciliations, and decisions.

But very few business owners start early.

I’ve met countless business owners (and individuals, too) who feel completely overwhelmed by tax time even though they had weeks and months to prepare.

And the same pattern repeats every year.

So let’s break the cycle now.

Why December Matters More Than You Think

If you prepare now, you avoid:

• last-minute scrambling
• missing documents
• wrong numbers
• filing extensions you didn’t need
• penalties
• and unnecessary stress

When March arrives, you want to be reviewing your tax return – not trying to remember what happened in January 2025.

December is the perfect time to get organized while everything is still fresh.

What Every S-Corporation & Partnership Should Do Before January 31

These steps apply to almost every business – simple, practical, and highly effective.

1. Reconcile ALL bank and credit card accounts through November

If your books are not reconciled, your tax return literally can’t be prepared correctly.

• Make sure deposits match income
• Categorize expenses
• Verify transfers
• Clean up duplicate transactions

This alone prevents 70% of common tax problems.

2. Review owner distributions, contributions, and loans

For S-Corporations, reasonable compensation comes into play.

For Partnerships, capital accounts matter.

December is the last chance to correct misclassified transactions.

3. Run a preliminary Profit & Loss and Balance Sheet

Not the final version – just a preview.

Ask yourself:

• Does the income look accurate?
• Are large or unusual expenses correct?
• Are assets recorded properly?
• Does the balance sheet even make sense?

If the numbers seem “off,” they probably are.

4. Gather your year-end documents BEFORE they disappear

Business owners often lose these:

• Payroll reports (especially if switching payroll companies)
• Loan statements
• Vehicle mileage logs
• Inventory counts
• Receipts for large purchases
• Health insurance and retirement plan payments

These documents are crucial and often hard to retrieve months later.

5. Schedule a tax planning conversation – even if short

You still have December tax-saving options, such as:

• Section 179 & Bonus Depreciation decisions
• Retirement contributions
• Timing income and expenses
• Shareholder/Partner adjustments
• Estimated tax payment planning

Waiting until February or March is too late.

6. Close out 2025 intentionally

Set aside time – even one hour – to note:

• Major business changes this year
• New contracts
• New Assets
• Employees or contractors added
• Any cash transactions
• Anything unusual

This helps your tax preparer understand the full picture.

Why So Many Business Owners Fall Behind

It’s not because they don’t care.

It’s because:

• They are busy.
• They don’t know where to start.
• They assume they’ll “do it after the holidays.”
• Tax paperwork feels overwhelming.
• They underestimate how much time it actually takes.

But being unprepared makes tax season far more stressful and expensive than it needs to be.

The Benefit of Starting Now

Preparing in December gives you:

• calmer January
• accurate financials
• fewer tax surprises
• time to fix issues
• stronger conversations with your tax professional
• better tax savings
• more control and confidence

And honestly, it just feels good to start the new year clean.

A Simple December Goal for Every Business

Here it is:

“By December 31, have everything ready so that in January you can hand your tax preparer clean, organized books, not a box of chaos.”

That one goal will transform your tax season.

Final Thought

Tax time doesn’t have to be overwhelming.

It becomes overwhelming only when everything is left for later.

If you start now – this week, this month – your 2025 business tax return will be smoother, faster, and far less stressful.

December is busy, but a few intentional steps now will save you weeks of stress in March.