QuickBooks Reconciliation Checklist Before Filing Taxes
Filing taxes without reconciling your QuickBooks file is like flying blind – your reports might look “fine,” but hidden errors can lead to missed deductions, incorrect filings, and potential penalties. Before submitting anything to your CPA or the IRS, use this reconciliation checklist to make sure your books are ready.
Download Our Free Brochure →1. Reconcile All Bank Accounts
Match every bank account balance in QuickBooks to your actual bank statements. This includes checking, savings, PayPal, and merchant accounts. Any discrepancies should be investigated and corrected before moving forward.
2. Reconcile Credit Card Accounts
Make sure all credit card accounts are up to date and reconciled to the latest statement. Look for duplicate charges, missing payments, or fees that weren’t recorded.
3. Review Uncategorized Transactions
QuickBooks often dumps imported transactions into “uncategorized income” or “uncategorized expense.” These need to be properly classified to ensure accurate reporting and maximum deductions.
4. Clean Up Old Outstanding Items
Old invoices that will never be paid? Deposits that never cleared? These can skew your financials and should be resolved or written off before filing.
5. Review Owner’s Draws and Loans
Improperly recording transfers, owner’s equity, or loan payments can affect your Balance Sheet and confuse your tax preparer. Make sure these are accurately posted in the correct accounts.
6. Check for Duplicate Entries
Bank feeds and manual entries can lead to duplicate transactions. These not only inflate your income or expenses but also throw off reconciliations.
Real-World Example
A retail business submitted their QuickBooks file to a CPA without reconciliation. The result:
- Overstated income by $18,000 due to duplicate deposits
- Missed $6,000 in deductible expenses
- Incorrect tax liability filed, resulting in penalties and a refile
We corrected the file, performed a full reconciliation, and worked with their CPA to submit an amended return – but all of it could have been avoided.
Download Our Free Brochure →Why Reconciliation Before Taxes Matters
Even if your bookkeeping is mostly complete, if it’s not reconciled, it’s not ready. Filing taxes based on an unreconciled file means you’re guessing – and the IRS doesn’t take guesses lightly. Clean, reconciled books are the foundation of accurate, compliant tax returns.
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FAQs
What does it mean to reconcile in QuickBooks?
Reconciliation means matching QuickBooks records to your actual bank or credit card statements to confirm accuracy.
How often should I reconcile accounts?
Monthly, at minimum. Reconciliation before tax season is essential.
Can you reconcile for multiple years at once?
Yes. We often reconcile backlogs of 12–24 months as part of our cleanup process.
Do I need to reconcile if I use QuickBooks Online?
Yes. Reconciliation is essential no matter which version of QuickBooks you use.
Before you send your QuickBooks file to your CPA or tax preparer, make sure it’s 100% reconciled.
Our team will clean, reconcile, and CPA-review your books – so your tax season goes smoothly.
