# Tax season readiness check for your 2026 books

Canonical: https://finbryn.com/us/tools/tax-season-readiness

Updated October 8, 2026

Finbryn provides a free 18-question tax season readiness check for US small business owners with calendar-year books. It scores year-end reconciliations, 1099 and W-2 readiness, payroll and owner pay from 0 to 100, then lists the fixes to make before hand-off. Forms W-2 and 1099-NEC are due February 1, 2027.

18 questions, about 6 minutes. Answer them on the page for an instant score from 0 to 100.

## Year-end books

### 1. Are all bank, credit card and loan accounts reconciled through the latest month-end statement (December 31, 2026 once the year has closed)?

A preparer builds the return from your year-end balances, so an unreconciled account means income or deductions can be missing or doubled.

- Yes, every account, with each reconciliation report saved
- Most are; one or two are a few months behind
- Several accounts are months behind, or none are reconciled

### 2. What's left in Uncategorized, Ask My Accountant or other suspense accounts for 2026?

Anything uncoded at year end is income or a deduction your preparer has to ask about, guess at or leave out.

- Nothing. Every 2026 transaction is coded
- A few small items, each with a note explaining it
- A meaningful balance nobody has researched

### 3. Are personal and business spending kept apart?

Personal costs aren't deductible, and once they're mixed into business accounts a preparer can't separate them from the totals.

- Yes. Separate business accounts, and any personal charge is coded to owner draws or a shareholder loan
- Shared accounts, but every personal item in them is coded to owner draws
- Separate accounts, but personal charges sometimes get coded as business expenses
- Shared accounts, and personal items aren't all separated out

## 1099s and information returns

### 4. Do you collect a Form W-9 from every contractor and vendor before the first payment?

Without a W-9 you may not have the legal name and taxpayer ID needed for a 1099, and backup withholding rules can apply.

- Yes. No vendor gets paid until a W-9 is on file
- We collect them, but usually in January when 1099s are due
- Rarely or never

### 5. Do you have a 2026 list showing which contractors need a Form 1099-NEC?

For payments made in 2026 the 1099-NEC threshold rose from $600 to $2,000, and card or PayPal-type network payments are left off because they're reported on Form 1099-K.

- Yes. Totals by vendor at the $2,000 threshold, card and PayPal-type network payments excluded, attorneys included
- We have totals, but they use the old $600 threshold or include card payments
- Not yet; we'll pull it together in January
- We haven't filed 1099s before, or didn't know we needed to

### 6. If you sell through Stripe, Square, Shopify, PayPal, Amazon or similar, can each Form 1099-K be tied to the sales in your books?

Form 1099-K reports gross payments before fees and refunds, so books that record net payouts won't match it without a reconciliation.

- Yes. The books show gross sales, with fees and refunds recorded separately
- We don't sell through payment processors or marketplaces
- The books show net payouts, but we can pull gross sales and fees from platform reports
- The books show net payouts, and nobody has compared them to a 1099-K

## Payroll and owner pay

### 7. Do the 2026 Forms 941 filed so far agree with wages and payroll taxes in your books, and will all four be tied to the W-3 before W-2s go out?

The IRS expects W-3 totals to match the four quarterly 941s, and your preparer compares both with the wage deduction on the return.

- Yes. Each quarter ties to the books, and the four 941s are tied to the W-3 before W-2s are filed
- No employees in 2026
- Our payroll provider files everything; we've never compared it to the books
- We've compared them and they don't match

### 8. If the business is an S corporation, how are owners who work in it paid?

The IRS expects an S corporation to pay reasonable wages to shareholders who work in the business before it makes non-wage distributions.

- Through payroll at a documented, reasonable salary, with distributions on top
- Not an S corporation
- Some salary, but it's small next to distributions and we haven't documented how it was set
- Owners take distributions only, with no payroll

### 9. If the company pays health insurance for a more-than-2% S corporation shareholder, is the premium added to that owner's W-2?

The IRS treats those premiums as Box 1 wages, and the owner needs them there to claim the self-employed health insurance deduction.

- Yes, payroll adds it to Box 1 before W-2s are issued
- Not applicable (not an S corporation, or no owner premiums paid)
- The premium is booked as a company expense and never reaches the W-2

## Assets, inventory, loans, owner money

### 10. For equipment, vehicles, computers and improvements bought in 2026, do you have each invoice and the date each item went into service?

Your preparer needs cost and placed-in-service dates to choose between expensing and depreciation, and those choices change the tax due.

- Yes, a fixed asset list with cost, date placed in service and invoice for each
- No significant asset purchases in 2026
- We have the invoices, but purchases are mixed into expenses
- We'd have to dig for the invoices and dates

### 11. If you sell products, will you have a December 31, 2026 inventory count or another year-end inventory figure you can support?

Cost of goods sold on the return depends on the inventory on hand at year end, so your preparer needs a count or a figure you can back up.

- Yes. A count (or a checked system count) as of December 31, valued at cost
- We don't sell products or hold inventory
- We'll estimate it from purchases and sales
- No count or estimate is planned

### 12. Do loan balances in the books match each lender's latest statement (December 31, 2026 once it arrives), with interest split out?

Interest is deductible and principal isn't, so the split flows straight into taxable income.

- Yes, tied to each lender's statement, and we'll tie them again at year end
- No loans or credit lines
- Payments are split, but the balance isn't tied to a lender statement
- Whole payments are booked to expense, or the balance never changes

### 13. Are transfers between you and the business recorded as owner contributions, draws or distributions, not as income or expenses?

Money you put in isn't income and money you take out isn't a deduction, but a bank feed can't tell the difference.

- Yes, every transfer is coded to an equity or shareholder loan account
- Mostly, but some ended up in income or expenses
- We don't track them separately

## Prior year, method and estimates

### 14. Do your January 1, 2026 opening balances match your 2025 tax return, with your preparer's year-end adjustments posted?

Your preparer starts from last year's return and adjustments, and if the books start somewhere else every balance sheet number needs rework.

- Yes. Last year's adjusting entries were posted and retained earnings ties
- This is the business's first tax year
- We think so, but nobody has checked
- No. Last year's adjustments were never posted, or the books changed after the return was filed

### 15. Do the books use the same overall method (cash or accrual) as the tax return?

Income and deductions land in different years under each method, and changing a return's overall method generally needs IRS consent on Form 3115.

- Yes, or the preparer documents a book-to-tax adjustment each year
- We're not sure which method the return uses
- The books switch between cash and accrual from year to year

### 16. Do you have a list of 2026 federal and state estimated tax payments, with dates and amounts?

Each payment has to be entered exactly as the tax agency recorded it, or the return shows a balance due that isn't real.

- Yes, with confirmations, including any payment made by January 15, 2027
- None were due, and our preparer confirmed that
- Payments were made, but there's no list yet
- None were paid, and nobody checked whether any were due

## Records and hand-off

### 17. Are receipts and invoices for 2026 expenses stored where your preparer could find one quickly?

The IRS can ask you to support any deduction, and a payment record alone doesn't show what was bought or why.

- Yes, attached to transactions in the software or filed by month
- For large purchases only
- They're spread across email, paper and phones

### 18. When will your closed 2026 books reach your tax preparer?

S corporation and partnership returns for 2026 are due March 15, 2027 and individual and C corporation returns April 15, 2027, so preparers need the books well before then.

- At least a month before the return is due
- In the last few weeks before the due date
- We usually file an extension because the books aren't ready

## How the score works

Each of the 18 questions has answers worth 0 to 4 points, and the first answer listed is the best one. The questions sit in 6 areas, and each area carries a weight. An area's score is the points earned divided by the points possible. The overall score is the weighted average of the area scores, scaled to 100 and rounded.

| Area | Weight | Questions |
| --- | --- | --- |
| Year-end books | 3 | 3 |
| 1099s and information returns | 3 | 3 |
| Payroll and owner pay | 2 | 3 |
| Assets, inventory, loans, owner money | 2 | 4 |
| Prior year, method and estimates | 2 | 3 |
| Records and hand-off | 1 | 2 |

| Score | Result | What it means |
| --- | --- | --- |
| 90 to 100 | Ready to hand to your preparer | Your 2026 books cover what a preparer needs: reconciled accounts, a clean 1099 list, tied-out payroll and support for assets, loans and owner transfers. Clear any findings below before you send the file. |
| 60 to 89 | Mostly ready, with fixes before hand-off | The books are in reasonable shape, but some items your preparer will ask about are still open. Each one left open adds questions, time and cost to the return. |
| 0 to 59 | Not ready for your preparer yet | Core pieces such as reconciliations, suspense balances, the split between personal and business spending or a year-end inventory figure aren't settled, so a return built on these books would rest on guesses. |

4 questions are marked critical. A 0-point answer, or a skipped answer, on any of them holds the result at "Not ready for your preparer yet", however high the total. The page then shows the score held just under the next band up and says how many critical items hold it.

- Are all bank, credit card and loan accounts reconciled through the latest month-end statement (December 31, 2026 once the year has closed)?
- What's left in Uncategorized, Ask My Accountant or other suspense accounts for 2026?
- Are personal and business spending kept apart?
- If you sell products, will you have a December 31, 2026 inventory count or another year-end inventory figure you can support?

Skipped questions score 0 and produce no findings. The result says how many were skipped.

General information for planning, not accounting, tax or legal advice for your situation. Deadlines are for calendar-year filers and were checked against IRS sources on October 7, 2026. Your preparer decides how items are reported on your return.

This version of the questions is dated October 8, 2026. Sources were last checked October 8, 2026; the full list is below. Your answers stay in your browser unless you ask for the PDF scorecard. Only the tool, the score, the band and how many questions you answered are counted.

## The checks behind the score

These 4 questions are critical. Each one shows what gets flagged for its lowest answer, why it matters and what to do about it.

### Are all bank, credit card and loan accounts reconciled through the latest month-end statement (December 31, 2026 once the year has closed)?

**Flagged:** Most accounts aren't reconciled for 2026. Without reconciled cash, the income and deductions on the return rest on unverified numbers, and any error in the books becomes an error on the return. **What to do:** Reconcile every account from January 2026 forward before the books go to your preparer, starting in January so differences are found where they began, not in December.

### What's left in Uncategorized, Ask My Accountant or other suspense accounts for 2026?

**Flagged:** Suspense and uncategorized balances are unresolved for 2026. An uncoded balance could be income, deductible costs, loan payments or owner transfers, and each one is treated differently on the return. **What to do:** Run the transaction detail for each suspense account, code items from the largest down using statements and invoices, and get every balance to zero before year end is closed.

### Are personal and business spending kept apart?

**Flagged:** Business and personal money are mixed and not sorted. Every transaction has to be sorted by hand before the return can be prepared, and IRS Publication 583 says to keep business accounts separate from personal ones. **What to do:** Open a business checking account and card before January 2027, run only business money through them, and for 2026 code each personal item in the shared accounts to owner draws.

### If you sell products, will you have a December 31, 2026 inventory count or another year-end inventory figure you can support?

**Flagged:** No year-end inventory figure is planned. Without ending inventory, cost of goods sold can't be worked out properly, and an error there changes taxable income dollar for dollar. **What to do:** Schedule a count for December 31, 2026 or the nearest business day, record quantity and cost per item, and send the totals and count sheets to your preparer with the books.

## FAQ

**Q: What is the Form 1099-NEC threshold for 2026?**

A: $2,000. The One Big Beautiful Bill Act raised the reporting threshold for nonemployee compensation on Form 1099-NEC (and most Form 1099-MISC payments) from $600 to $2,000 for payments made in 2026, and the IRS says it may be adjusted for inflation starting in 2027. Payments made by card or through a third party settlement organization such as PayPal stay off the 1099-NEC because they're reported on Form 1099-K; payments by check, ACH, wire or other bank transfer stay on it. The [Form 1099 guide for 2026](/us/guides/form-1099-guide-2026) covers forms, W-9s and e-filing in full.

**Q: Is the Form 1099-K threshold $600 or $20,000?**

A: For payment apps and online marketplaces it's back to more than $20,000 across more than 200 transactions, after the One Big Beautiful Bill reinstated the earlier threshold retroactively (IRS news release IR-2025-107, October 23, 2025). That floor covers payment apps and marketplaces (third party network transactions), not card payments processed through a merchant account. Either way, the IRS says business income must be reported whether or not a 1099-K arrives.

**Q: When are 2026 business tax returns due?**

A: For calendar-year filers, S corporation (Form 1120-S) and partnership (Form 1065) returns are due March 15, 2027, and individual (Form 1040) and C corporation (Form 1120) returns are due April 15, 2027. Form 7004 or Form 4868 extends the time to file, not the time to pay, so any tax owed is still due on the original date.

**Q: When are W-2s and 1099s due for 2026?**

A: Forms W-2 go to employees and the Social Security Administration by February 1, 2027, and Forms 1099-NEC go to recipients and the IRS by the same date, since January 31, 2027 is a Sunday. If you file 10 or more information returns in total they must be e-filed, and the IRS says a Transmitter Control Code for its IRIS system can take up to 45 days, so apply in the fall.

**Q: What should I send my tax preparer for 2026?**

A: The closed year-end P&L, balance sheet and general ledger, December 2026 reconciliation reports for every account, a fixed asset list with invoices and in-service dates, lender statements as of December 31, 2026, copies of the 1099s and W-2s you issued and any 1099-Ks you received, the four Forms 941, and a list of estimated tax payments with dates.

**Q: How is this score worked out?**

A: Each answer earns 0 to 4 points, areas are weighted (year-end books and 1099s count most) and the result is scaled to 100. Four questions are critical: reconciliations, suspense balances, the split between personal and business money and, for product sellers, a year-end inventory figure. A 0 on any of them puts the result at 'Not ready for your preparer yet' however high the total, because the return would rest on guesses. This version is dated October 8, 2026.

## Sources

1. [IRS, Instructions for Forms 1099-MISC and 1099-NEC ($2,000 threshold for 2026, due dates, card payments, attorneys)](https://www.irs.gov/instructions/i1099mec) (2026-10-07)
2. [IRS news release IR-2025-107, Form 1099-K threshold reverts to $20,000 and 200 transactions (October 23, 2025)](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000) (2026-10-07)
3. [IRS, Understanding your Form 1099-K (all income must be reported)](https://www.irs.gov/businesses/understanding-your-form-1099-k) (2026-10-07)
4. [IRS, Instructions for Form 1099-K (gross amount)](https://www.irs.gov/instructions/i1099k) (2026-10-07)
5. [IRS, 2026 Instructions for Forms W-2 and W-3 (February 1, 2027 due date; reconciling with Form 941)](https://www.irs.gov/instructions/iw2w3) (2026-10-07)
6. [IRS, Backup withholding (24% rate)](https://www.irs.gov/businesses/small-businesses-self-employed/backup-withholding) (2026-10-07)
7. [IRS, General Instructions for Certain Information Returns (payer liable for uncollected backup withholding; 10-return e-file rule)](https://www.irs.gov/instructions/i1099gi) (2026-10-08)
8. [IRS, E-file information returns (10-return threshold, IRIS, Transmitter Control Code)](https://www.irs.gov/filing/e-file-information-returns) (2026-10-07)
9. [IRS, S corporation compensation and medical insurance issues](https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical-insurance-issues) (2026-10-07)
10. [IRS, Tangible property final regulations (de minimis safe harbor)](https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations) (2026-10-07)
11. [IRS, About Form 3115, Application for Change in Accounting Method](https://www.irs.gov/forms-pubs/about-form-3115) (2026-10-07)
12. [IRS Publication 509 (2026), Tax Calendars (estimated tax installments)](https://www.irs.gov/publications/p509) (2026-10-07)
13. [IRS, Instructions for Form 1120-S (when to file; Form 7004)](https://www.irs.gov/instructions/i1120s) (2026-10-07)
14. [IRS, Get an extension to file your tax return](https://www.irs.gov/filing/get-an-extension-to-file-your-tax-return) (2026-10-07)
15. [IRS Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583) (2026-10-07)
16. [IRS, How long should I keep records?](https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records) (2026-10-07)

## Related

- [Form 1099 Guide for Tax Year 2026: NEC, MISC, and 1099-K](https://finbryn.com/us/guides/form-1099-guide-2026)
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