Year-End Compliance Checklist: 9 Smart Moves for Small Business Owners

Year end is not about the final closing of the books for the year, it’s about cleaning up the back office. Compliance tasks often fall through the cracks until tax season, but handling them now means fewer headaches (and possibly fewer penalties) later.

Here are nine compliance-driven actions every small business should take before the calendar flips:

Request W-9s from Contractors and Vendors

If you’ve paid any non-employees $600 or more during the year, you’re likely required to issue Form 1099-NEC or 1099-Misc. But you can’t do that without a completed W-9 on file.

✅ Reach out now to contractors, consultants, and service providers and obtain a W-9 form

✅ Confirm names, business entities, and taxpayer ID numbers

✅ Do so before January to avoid the rush and make collecting a W9 part of your vendor onboarding for the future. Avoid vendors in the future if they refuse to provide one.

Review for Long Outstanding Checks

Uncleared checks (payroll, reimbursements, vendor payments) can complicate your accounting and potentially trigger state escheatment laws for unclaimed property.

✅ Run an aging report of checks >60–90 days old

✅ Follow up with recipients of any uncashed checks

✅ Void and reissue where appropriate

✅ Document every action for audit readiness

Reconcile All Bank and Credit Card Accounts (Including Loan Splits)

Accurate reconciliations are foundational for closing the year cleanly but don’t stop at just matching balances.

✅ Reconcile every cash, credit card, and loan account

✅ Ensure principal and interest are correctly allocated on debt payments

✅ Match transactions to supporting documents

✅ Confirm that all reconciling items are legitimate and timely

Verify and Update Employee and Contractor Information

Before you issue W-2s or 1099s, check the details:

✅ Legal names and addresses

✅ Social Security Numbers / EINs

✅ Employment status and classification (employee vs. contractor)

Mistakes here lead to costly corrections and delays.

Check Tax Accounts for Filing Frequency, Rate, and Nexus Changes

Tax compliance evolves  especially if your business has grown, added staff, or sold in new states.

✅ Review each tax account (sales, payroll, excise) for filing frequency and rate notices as they often change annually

✅ Confirm current sales tax rates in all jurisdictions

✅ Evaluate economic nexus — have you triggered collection requirements in new states?Missing these updates could lead to underpayment penalties or missed registration deadlines.

Close Inactive or Duplicate Accounts

Simplify your back office and reduce risk by shutting down:

✅ Unused bank or credit card accounts

✅ Outdated merchant or payroll services

✅ Duplicate software tools or subscriptions

Fewer accounts = cleaner books and tighter control over fraud risks.

Review Accountable Plans

An accountable plan allows you to reimburse employees for business expenses without counting it as taxable income. But to stay compliant:

✅ Ensure a written accountable plan is in place

✅ Confirm all reimbursements have timely expense substantiation

✅ Include receipts, business purpose, and mileage tracking

Reimbursements outside of an accountable plan may be considered taxable wages and trigger payroll implications

Update Mileage Logs

Business mileage is one of the most common, and most audited deductions. Make sure:

✅ All employees and owners have logged business miles

✅ Logs include date, destination, purpose, and mileage

✅ Year-end odometer readings are recorded for accurate annual totals

Meet with Your Tax Professional Before the Year Ends

Don’t wait until tax season to ask critical questions. Schedule a meeting now to:

✅ Review year-end deadlines and filing requirements

✅ Plan for 1099s, W-2s, and state compliance

✅ Discuss any changes in business activity, structure, or compensation

✅ Get answers before the crunch hits

Final Thoughts

Year-end is more than a finish line, it’s an opportunity to clean up, get organized, and finalize plans before some options expire. These internal compliance steps may not be glamorous, but they help put your business on firm footing and discover issues while there is still time to address them.

At Clarity Advanced Accounting, we help small businesses like yours handle the details with precision. If you need help checking these items off your list, reach out — we’ll make sure you start the new year on solid footing.