Business Tax Season Readiness for 2026 —
What to Fix Before Filing 2025 Returns
As businesses prepare to file 2025 tax returns during the 2026 tax season, readiness matters more than most owners expect.
Tax returns are not created in isolation. They are built on your accounting accuracy, systems, controls, and historical data. When those foundations are incomplete or misaligned, filing becomes reactive — and expensive.
This checklist explains what should be in place before filing, why each item matters, and how gaps typically translate into higher taxes, audit exposure, or missed planning opportunities.
Who This Guide Is For
This guide is designed for:
eCommerce businesses - including : Shopify accounting tax preparation, Amazon seller tax readiness.
Odoo-based and ERP-driven companies : Odoo accounting tax readiness
Real estate investors and STR operators
Multi-entity LLCs, S-corps, partnerships, and C-corps
If your business has outgrown basic bookkeeping or one-time tax prep, this applies to you.
1. Accounting Close & Reconciliations
What should be ready
Bank and credit card reconciliations completed through year-end
A clean balance sheet with no unexplained balances
Clear separation between business and personal activity
Why this matters
Tax returns rely on ending balances, not just income totals.
Unreconciled accounts often lead to overstated income, missed deductions, and post-filing corrections.
Tax impact
Poor reconciliations usually mean paying more tax than necessary or responding to notices later.
2. Revenue Accuracy & Platform Reconciliation
What should be ready
Shopify, Amazon, Stripe, POS, or marketplace reports reconciled to accounting
Fees, refunds, and chargebacks properly netted
No unexplained gaps between platforms and financials
Why this matters
Platform gross sales are not taxable income.
Misclassification inflates revenue and distorts margins.
Tax impact
Unreconciled platforms frequently cause overreported income and incorrect sales-tax exposure.
3. Inventory & Cost of Goods Sold (If Applicable)
What should be ready
Inventory quantities aligned with physical reality
Consistent valuation method (FIFO, average, etc.)
Clean cutoff between purchases, inventory, and COGS
Why this matters
Inventory errors directly affect taxable profit.
Tax impact
Misstated inventory can inflate income, trigger scrutiny, or eliminate legitimate deductions.
4. Payroll & Owner Compensation
What should be ready
Payroll filings completed and reconciled
Owner compensation reviewed for reasonableness (S-corps)
No unresolved payroll tax notices
Why this matters
Payroll and owner pay are among the most audited areas for small businesses.
Tax impact
Incorrect handling can lead to penalties, reclassification of distributions, and additional employment taxes.
5. Sales Tax & Nexus Exposure
What should be ready
States with sales-tax nexus clearly identified
Marketplace facilitator rules applied correctly
Outstanding filings addressed
Why this matters
Sales-tax issues often surface after income-tax filing, when upstream fixes are no longer possible.
Tax impact
Unmanaged nexus creates state liabilities that compound over time.
6. Fixed Assets, Loans & Owner Transactions
What should be ready
Assets properly capitalized and depreciated (not expensed randomly)
Loan statements on file (year-end balances + principal/interest breakdown)
Loan balances in the books tie to lender statements
Loan payments split correctly between:
Principal (balance sheet)
Interest (P&L expense)
Owner/shareholder activity tracked clearly (distributions, draws, loans)
No unresolved “plug” balances or suspense accounts
Why this matters
Balance sheet errors cascade into incorrect depreciation, lost deductions, and misreported liabilities. Loan payment misposting is one of the most common issues we see — especially when businesses treat payments as “loan expense” instead of separating principal vs interest.
Tax impact
Missed depreciation can create permanent lost deductions
Incorrect loan posting can either lose interest deductions or create compliance exposure from overstated expenses
7. Prior-Year Items & Carryforwards
What should be ready
Prior-year losses, credits, and depreciation schedules reconciled
Open notices resolved
Clean opening balances
Why this matters
Tax errors compound when left unaddressed year over year.
Tax impact
Untracked carryforwards often mean missed tax savings.
Not Sure Where You Stand?
Most businesses have at least two hidden readiness gaps they don’t see until filing.
Take the Business Tax Season Readiness Check to get:
A readiness score
Risk visibility
Clear next steps
Start the Business Tax Readiness Check
Want Help Before Filing?
This checklist is for educational purposes only and does not constitute tax advice.
If you’d like professional support reviewing readiness, identifying exposure, or planning before filing, you can contact our team to discuss next steps — whether or not we work together.
Business Tax Season Readiness – Frequently Asked Questions
Business tax readiness means your books, systems, and supporting documents are accurate, complete, and aligned before filing your 2025 business tax returns during the 2026 tax season.
It goes beyond having receipts or reports — it ensures your financials are defensible, optimized, and compliant, reducing last-minute corrections and unnecessary tax exposure.
The key is moving from reactive cleanup to ongoing readiness.
This typically involves:
Timely bank and credit-card reconciliations
Clear handling of revenue, inventory, payroll, loans, and owner activity
Addressing issues during the year rather than at filing time
When problems are identified early, businesses avoid rushed filings, extensions, and unpleasant surprises.
Tax-ready books provide benefits beyond compliance:
Fewer surprises during tax season
Lower risk of IRS or state notices
Earlier identification of tax-saving opportunities
Better cash-flow and profitability visibility
Faster, smoother filings with fewer extensions
Most importantly, tax readiness enables planning, not just reporting.
Only the interest portion of a loan payment is generally deductible.
Many businesses mistakenly record full loan payments as expenses or apply payments entirely to the loan balance, which leads to:
Missed interest deductions
Incorrect loan balances
Misleading financial statements
Properly tracking loan balances and interest ensures accurate deductions and cleaner filings.
Yes. For business clients, tax readiness is not a one-time event.
Our approach focuses on:
Reviewing accounting accuracy before filing
Identifying gaps that impact tax or compliance
Providing year-round guidance on high-risk areas
Helping ensure books support accurate, defensible filings
This reduces last-minute cleanup and allows filings to be based on reliable financial data.