Small Business Tax Preparation Checklist

STEP 1 —Get your business records in order

• Profit & loss statement for the tax year
• Balance sheet as of year end
• General ledger (all categorized transactions)
• Prior year federal tax return
• Business formation documents (LLC articles, partnership agreement, etc.)
• EIN confirmation letter (CP 575)
• Ownership and profit-sharing percentages
• Business licenses and permits
• Sales tax permit and filing records

STEP 2 —Income documents

• Gross receipts or sales reports (POS, invoicing, or e-commerce platforms)
• Form 1099-K from payment platforms (2026 threshold: $20,000 and 200 transactions — income is taxable even if no form is issued)
• Forms 1099-NEC received from clients
• Invoice records and accounts receivable summary
• Cash and card sales summaries
• Interest and dividend statements on business accounts (1099-INT / 1099-DIV)
• Other income (refunds, rebates, grants, asset sales)

STEP 3 —Expense records

• Expenses categorized by account (your bookkeeping reports)
• Receipts over the IRS substantiation threshold
• Contractor payments and W-9s on file
• Rent and lease agreements
• Utility statements (electricity, internet, phone)
• Business insurance premium records
• Professional fees (legal, accounting, consulting)
• Advertising and marketing spend
• Bank and credit card statements (all accounts, full year)
• Loan statements and interest paid
• Business credit card annual summaries

STEP 4 —Assets, equipment and vehicles

• Purchase invoices for equipment and assets
• Date each asset was placed in service
• Business-use percentage for mixed-use property
• Mileage log (2026 rates: 72.5¢/mile Jan 1–Jun 30; 76¢/mile Jul 1–Dec 31)
• Parking and toll receipts
• Vehicle loan statements and depreciation records

STEP 5 —Payroll and contractor records

• Payroll reports for the full year
• Forms W-2 (employees) and W-3 (transmittal)
• Quarterly Form 941 filings
• State unemployment (SUTA) filings
• Contractor W-9s collected
• Total payments by contractor
• Copies of Forms 1099-NEC issued

STEP 6 —Deductions worth double-checking

• Home office (square footage and expense breakdown)
• Health insurance premiums (self-employed)
• Retirement plan contributions (SEP, solo 401(k), SIMPLE)
• Self-employment tax deduction (half of SE tax)
• Qualified Business Income deduction (20% QBI, now permanent; new $400 minimum for taxpayers with at least $1,000 of active qualified business income)
• Qualified tips up to $25,000 and qualified overtime up to $12,500 single / $25,000 joint (tax years 2025–2028, subject to income phase-outs)
• Charitable contributions (with receipts or acknowledgment letters)
• Business travel and meals (meals generally 50% deductible)
• Education and professional development
• Software subscriptions and digital tools

STEP 7 —State requirements (Texas)