Every January the same thing happens. A business owner opens their books to send things to the accountant and finds 300 uncategorized transactions, a credit card that was never connected, and no idea who got paid how much. Closing the books is not hard. It just has to happen before the tax deadlines start, not after.
The short answer: To close your books at year end, record every 2026 transaction, reconcile each bank, card and payment app account to its December 31 statement, clear out uncategorized items, check the profit and loss for mistakes, confirm contractor totals for 1099s, and lock the year in your software. If your books were kept up monthly, most small businesses finish in one to three days.
Want a second pair of eyes before you file? Book a free 15-minute year-end call with our White Plains team.
What "closing the books" actually means
Closing the books means you stop changing a year's numbers because they are final. Your income, expenses and account balances for January 1 to December 31 match the real bank and card statements, and your software is set so nobody can edit that year by accident.
It matters for three reasons:
- Your tax return is built from these numbers. Wrong books mean a wrong return, or a preparer billing hours to fix them.
- 1099s and W-2s are due fast. Forms for 2026 payments are due February 1, 2027. You cannot file them from messy books.
- Lenders and landlords ask for year-end statements. A clean profit and loss and balance sheet open doors.
The 10-step year-end bookkeeping checklist
| Step | What to do | Why it matters |
|---|---|---|
| 1. Enter everything | Record every 2026 sale, expense and receipt, including December charges that post in January | Missing expenses mean paying tax you do not owe |
| 2. Reconcile every account | Match checking, savings, credit cards, loans and payment apps to their 12/31 statements | This is the step that proves your books are right |
| 3. Clear the clutter | Empty "uncategorized" and "ask my accountant", delete duplicates, void old uncashed checks | Preparers charge by the hour to sort these |
| 4. Separate personal spending | Move personal charges to owner draws, not expenses | Personal items as expenses are an audit red flag |
| 5. Check money owed to you | Write off invoices you will never collect | You should not pay tax on money you never got (accrual books) |
| 6. Check bills you owe | Enter unpaid December bills | Gives a true picture of the year |
| 7. Confirm contractor totals | List what each contractor was paid and how | Sets up your 1099s (rules below) |
| 8. Review payroll | Year-to-date wages should match payroll reports | Errors here flow into W-2s and the NYS-45 |
| 9. List equipment and vehicles | Date, cost and receipt for anything bought in 2026; count inventory on 12/31 if you sell products | Needed for depreciation and cost of goods sold |
| 10. Lock the year and back up | Set a closing date in QuickBooks, Xero or BIB Pro and save year-end reports | Stops accidental edits after you file |
Reconcile sounds technical, but it only means this: the balance in your books on December 31 equals the balance on the bank statement, and every line in between is accounted for. If it does not match, something is missing or doubled.
Contractors and 1099s: the step people skip
For payments made in 2026, you send a Form 1099-NEC only to contractors you paid $2,000 or more (it was $600 before). How you paid matters:
- Check, cash, ACH bank transfer or Zelle: you file the 1099-NEC.
- Credit card, PayPal or Venmo goods and services, Square or Stripe: the payment company reports it on Form 1099-K, so you do not.
Collect any missing W-9 forms in December, while your contractors still answer email. Full rules, including the attorney exception, are in our guide to the new $2,000 1099 threshold.
New York year-end deadlines for your 2026 books
| What | Due |
|---|---|
| NY sales tax return, September to November 2026 quarter | 12/21/2026 (12/20 is a Sunday) |
| Fourth-quarter 2026 estimated tax, federal and New York | 01/15/2027 |
| W-2s and 1099-NECs to workers and the IRS | 02/01/2027 (1/31 is a Sunday) |
| NYS-45 payroll return for Q4 2026 | 02/01/2027 |
| S corporation and partnership returns, or extension | 03/15/2027 |
| Individual and sole proprietor returns, or extension | 04/15/2027 |
A White Plains example
A cleaning company on Mamaroneck Avenue has one checking account, one business credit card, Square for card sales and four part-time cleaners paid by Zelle. Their year-end close looks like this:
- Reconcile checking and the credit card to December statements (about two hours).
- Match Square payouts to bank deposits, so card fees are recorded as an expense instead of disappearing.
- Add up Zelle payments per cleaner: three passed $2,000 and need a 1099-NEC, one did not.
- Move a family dinner and a Costco run off the business card and into owner draws.
- Lock 2026 and send the profit and loss, balance sheet and 1099 list to the tax preparer.
Total time: one afternoon, because they reconciled every month. A business that skipped the year can expect one to two weeks of catch-up bookkeeping first.
What to hand your tax preparer
- Year-end profit and loss and balance sheet
- December 31 statements for every bank, card and loan account
- Copies of the 1099s and W-2s you issued, and any 1099-K forms you received
- Loan statements showing interest paid for the year
- A list of equipment and vehicles bought or sold
- Your business mileage log
Keep this year-end file at least 3 years after you file, and payroll records 6 years under New York law. See how long to keep business records in New York.
What we tell our clients
Do not start in January. The owners who have the easiest tax season reconcile November in early December. Then January only holds one month of work, and there is still time to make year-end tax moves from our year-end tax planning checklist, like buying equipment before December 31.
The second thing we see every year: card processing fees and loan interest that never got recorded. On a business doing $300,000 in card sales, processing fees alone can run several thousand dollars. That is a real deduction sitting in your bank statement.
Can I close my own books?
Yes, if you have one or two accounts, fewer than about 100 transactions a month and no payroll. Use the checklist above. If you want an app that scans receipts, logs mileage and shows what to set aside for taxes, BIB Pro does that for $29.99 a month, and our team can review your books before you file.
If you have several accounts, employees, inventory or a year you never touched, a professional close usually pays for itself in deductions found and preparer hours saved.
Let us close your books
London's Tax Services handles year-end bookkeeping, catch-up bookkeeping and 1099 filing for small businesses across Westchester County, the Bronx and New York City, from our office at 75 South Broadway in White Plains. On a free 15-minute call we look at where your books stand, tell you what is missing, and give you a flat quote before any work starts. No obligation.
Book your free year-end call or call (646) 917-7714. See our year-end bookkeeping service for what is included.
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