Getting Your Taxes Ready

Get Ahead of the Deadline: The Essential Checklist for Getting Your Taxes Ready Now

Getting Your Taxes Ready. For most business owners and high-net-worth individuals, the annual tax deadline is synonymous with stress, late nights, and a scramble for misplaced receipts. However, at TYS, we view tax preparation not as a year-end chore, but as a year-round, strategic process that maximizes deductions, minimizes liabilities, and provides the best possible financial outlook for the year ahead.

With major tax law changes like the “One Big Beautiful Bill Act” retroactively affecting 2024 and significantly changing 2025’s outlook (particularly concerning Section 179 and Bonus Depreciation), now is the crucial time to begin Getting Your Taxes Ready—months before the filing deadline. Procrastination is the single most expensive financial mistake you can make.

Phase I: The Organizational Foundation

The best defense against a costly audit is an impeccable offense. This phase focuses on cleaning up the data a CPA will need to work with.

1. Tidy Your Books (The Bookkeeping Bridge): Ensure your bookkeeping is finalized for the year. This means all bank and credit card accounts are fully reconciled through the end of the year, and all outstanding Accounts Payable and Accounts Receivable are reviewed and categorized. For a small business, particularly a construction firm, this means every labor hour, material cost, and sub-contractor invoice must be correctly allocated to its respective job number.
2. Review and Classify Large Expenditures: Pull all documentation for major asset purchases made during the year (machinery, software, vehicles). This is especially important this year due to the retroactive increase of the Section 179 deduction limit. Your TYS CPA needs to review these costs to maximize your immediate expensing opportunity.
3. Prepare for Information Returns (1099s): Identify all independent contractors, attorneys, and non-incorporated service providers paid over $600 during the year. Verify their names, addresses, and EINs/Social Security Numbers using Form W-9. Failing to send 1099s by the January 31 deadline results in fines and can complicate your ability to deduct those expenses.
4. Confirm Basis in S-Corps/Partnerships: For owners of pass-through entities, gather documentation to confirm your tax basis (your investment in the company). This is critical for properly deducting losses and calculating gains upon sale.

Phase II: The Strategic Review (January – February)

This is where the specialized expertise of TYS delivers maximum value. The goal is to identify and execute on all available tax-saving opportunities.

1. Analyze and Optimize Entity Structure: If there were any structural changes (like a shift from LLC to S-Corp) or if the business experienced significant unforeseen profit, discuss with your TYS CPA whether the current structure remains the most tax-efficient, particularly for managing New York State or California tax burdens.
2. Maximize Retirement Contributions: Finalize all contributions to qualified retirement plans (e.g., SEP-IRA, SIMPLE IRA, 401(k)). Many small business plans allow contributions to be made up to the tax filing deadline, but they must relate to the prior tax year.
3. Construction-Specific Audit (WIP Review): If you are a construction client, your TYS expert will lead a meticulous review of your Work-in-Progress (WIP) Schedule. This is the most crucial, specialized report in construction accounting. It compares the revenue recognized, the expenses incurred, and the percentage of completion for every contract. An accurate WIP prevents over- or under-reporting income, which is a major red flag for the IRS and a direct determinant of your annual profitability.
4. Gather Personal Deductions: Organize all documentation for itemized personal deductions, including:

• State and local taxes paid (SALT cap still applies).
• Mortgage interest and real estate taxes.
• Charitable contributions (including non-cash contributions and necessary appraisals).
• Medical expenses exceeding the AGI threshold.

Phase III: CPA Engagement and Filing (February – April)

With clean books and all necessary documentation gathered, the CPA can now perform the final, high-value calculation and filing work.

1. Final Document Submission: Provide all W-2s, 1099s, K-1s, and bank/brokerage statements to your CPA. A clean, organized package ensures faster, more accurate processing.
2. Review and Sign: Carefully review the final return prepared by TYS. Your CPA will explain the strategic decisions made and the rationale for the final liability or refund.
3. Estimate Q1 & Q2: Before the current year’s deadline, your TYS CPA will help you calculate and remit accurate Q1 and Q2 estimated tax payments for the next tax year. This proactive step prevents underpayment penalties and smooths cash flow.

By following this strategic timeline, the tax season transforms from a painful deadline into an opportunity for strategic financial planning, ensuring that high-net-worth individuals and SMBs in Rochester, NY, and Walnut Creek, CA—especially those managing the volatile finances of the construction sector—keep more of their hard-earned money.
Stop scrambling and start strategizing. Let the experts at TYS turn your tax prep into proactive financial management. Contact us today to secure your tax planning consultation.