It's late October. The year isn't over yet, but it's close enough that the numbers you have now are mostly the numbers you'll file with.
If your books are behind, this is the best time to catch up. Not in March. Now.
Here's why, and what to look at first.
Why clean up now instead of at tax time
When books get cleaned up in the spring, it's usually a scramble. Receipts are hard to find, you've forgotten what that $640 charge in June was for, and every question slows down your return.
Cleaning up in the fall gives you three things:
Time to fix problems while you can still remember the details.
Real numbers for your Q4 estimated payment, due January 15, 2027.
A chance to plan. If profit is higher than you thought, there may still be time to make moves before December 31. Once the year closes, most of those options close with it.
1. Clear out "uncategorized" and "Ask My Accountant"
Most bookkeeping software has a holding bucket for transactions nobody sorted. It fills up fast.
Go through it and give every item a real category. A few tips:
Start with the biggest amounts. They matter most.
Look for repeat vendors and set up rules so they sort themselves going forward.
If you can't figure out what something is, check the bank or card statement memo, then your email for a receipt.
Uncategorized expenses often turn into deductions nobody claims. That's money left on the table.
2. Separate personal from business
This one comes up constantly, especially with freelancers and single-owner businesses.
If you paid for groceries with the business card, or paid a business bill from your personal account, it needs to be recorded the right way:
Personal spending from the business account usually gets booked as an owner draw (or distribution), not an expense.
Business costs paid personally can often be recorded as an owner contribution or reimbursed, so you don't lose the deduction.
Going forward, the easiest fix is simple: one account and one card for the business, used only for the business.
3. Get ready for 1099s now
If you paid contractors $600 or more this year, you'll likely need to send them a 1099-NEC by January 31, 2027.
Don't wait until January to chase paperwork. Before year-end:
Pull a list of everyone you paid who isn't on payroll.
Make sure you have a W-9 on file for each one (name, address, tax ID).
Note which ones were paid by card or through apps like PayPal. Those payments are often reported by the payment company instead, so they may not need a 1099 from you.
Missing W-9s are the number one thing that delays 1099 filing.
4. Sort out loans and owner draws
Loan payments and owner money get mixed up all the time.
Loan payments are part principal, part interest. Only the interest is an expense. The principal reduces what you owe.
Owner draws aren't expenses either. They're you taking money out.
Money you put in isn't income. It's a contribution or a loan to the business.
If these are booked wrong, your profit looks off, and your tax bill can be wrong in either direction. Compare your loan balances to the lender's year-end statement once it arrives.
5. Reconcile every account
Last step: make sure your books match your bank and credit card statements, month by month. If the balances line up, you can trust your numbers. If they don't, something is missing or doubled.
How this feeds your January 15 estimate
Your fourth-quarter estimated payment is due January 15, 2027, for both federal and New York State.
If your books are current, you can look at actual profit through November or December and set that payment based on real numbers, not a guess. That helps you avoid underpaying (and owing penalties) or overpaying (and tying up cash you could use).
New York business owners also have state and, in some cases, local items to think about, so having clean numbers makes those easier too.
When to get help
If you're months behind, or you're not sure how to book owner draws and loans, a cleanup session with a CPA is usually faster than guessing. That's exactly what year-round bookkeeping and planning are for.
This article is general information, not tax advice. Contact Ray to discuss your situation.
Ready for help with estimates, books, or year-round planning? Book a free 10-minute Fit Check and we'll see if we're a good fit.
