How To Get Your Books Tax-Ready in 2025
Every tax season, the same pattern shows up: business owners scramble for bank statements, guess at missing numbers, and send half-finished QuickBooks files to their CPA hoping it will all “get fixed somehow.”
What your CPA actually wants is simple: clean, reconciled, tax-ready books.
If your bookkeeping is behind or messy, this checklist will walk you through what needs to happen before you hand anything over. And if you decide it is too much to do yourself, this is exactly the kind of work our catch up bookkeeping and QuickBooks cleanup teams handle every day.
1. Reconcile every bank and credit card account
Start with the basics: your books must match reality.
For each bank and credit card account:
- Make sure every month is reconciled up to the current period
- Investigate and clear any unreconciled differences
- Confirm opening and closing balances actually match the statements
If you are months behind, manual reconciliation becomes painful fast. That is where a dedicated catch up bookkeeping service can take over the heavy lifting and deliver you a tax-ready file instead of a pile of statements.
2. Fix incorrect or missing categorizations
Misclassifying income and expenses does two bad things:
- It can make you pay more in taxes than you should
- It can create red flags if the IRS ever looks at your return
Common problem areas:
- Owner draws vs payroll
- Personal expenses coded as business
- Meals, travel, and entertainment
- Contractor payments that should match 1099-NEC forms
A proper QuickBooks cleanup project will include a review and re-classification of these problem areas so that the numbers your tax preparer sees are actually usable.
3. Clear old A/R and A/P items
Old invoices you will never collect and unpaid bills that have already been resolved clutter your balance sheet and distort profit.
Before tax season:
- Review accounts receivable and write off bad debts where appropriate
- Clean up duplicate or incorrect customer invoices
- Clear vendor bills that were paid but never marked as such
If your accounts receivable and payable reports look completely unrealistic, that is another sign it is time to bring in ongoing monthly bookkeeping support instead of waiting until next tax season.
4. Review payroll, sales tax, and loan balances
Your tax preparer will rely on these balances being correct:
- Payroll liabilities and payroll tax payments
- Sales tax collected vs remitted
- Loan balances and interest vs principal splits
These often require adjustments at year end. A bookkeeper who works with your accounting and bookkeeping services year round can help you avoid emergency corrections in March and April.
5. Generate the core financial reports your CPA needs
At a minimum, you should be able to generate:
- Profit and Loss (for the full tax year)
- Balance Sheet (as of year end)
- General Ledger (for detail, if requested)
If you run these reports and they do not look right, that is your warning sign. It is usually more cost effective to pay for a focused QuickBooks cleanup and catch up bookkeeping project than to pay your CPA firm to untangle bookkeeping issues during tax season.
When to stop doing it yourself
If any of the following are true, it is probably time to ask for help:
- You are more than three months behind on bookkeeping
- You cannot reconcile to your bank and credit card statements
- Your CPA keeps asking for corrections every year
- You are not confident in how you are categorizing expenses
That is exactly what our catch up bookkeeping and ongoing monthly bookkeeping services are designed for: get you tax-ready now and keep you clean all year, so tax season is just a report, not a crisis.
