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January 31
IRS deadline for W-2 and 1099-NEC filing — cleaning businesses that miss this deadline face penalties of $60–$310 per form, plus potential payee penalties for late W-2 delivery to employees
Source: IRS Form W-2 Instructions 2024; IRS Form 1099-NEC Instructions 2024
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Run year-end job profitability analysis before your CPA meeting — know which accounts gained and lost margin before setting next year's pricing strategy.
Year-end bookkeeping for a cleaning business involves more than just gathering receipts for your CPA. A thorough December close requires completing 25 discrete tasks across payroll compliance, fixed asset accounting, vendor management, tax planning, and financial statement preparation. Operators who complete this checklist before December 31 are positioned for a clean, stress-free tax season. Those who skip it spend February and March scrambling.
December Timeline
By December 15:
- Review all open receivables — collect or write off any account 90+ days past due before year-end
- Confirm all vendor payments — ensure year-end supply orders are invoiced and recorded
- Review payroll — confirm all employees have current W-4 information on file
By December 31 (before books close): Complete the 25-task checklist below.
By January 15:
- Set payroll W-2 processing in motion with your payroll provider
- Compile 1099-NEC data for all vendors paid $600+ during the year
By January 31:
- All W-2s distributed to employees
- All 1099-NECs sent to recipients and filed with IRS (both deadlines are January 31)
The 25-Task Year-End Checklist
| # | Task | Category | Deadline |
|---|---|---|---|
| 1 | Reconcile all bank accounts (checking, payroll, savings) | Banking | Dec 31 |
| 2 | Reconcile credit card statements | Banking | Dec 31 |
| 3 | Record all December vendor invoices received | AP | Dec 31 |
| 4 | Record year-end accruals (services received, not invoiced) | Accruals | Dec 31 |
| 5 | Record depreciation entries for all fixed assets | Fixed Assets | Dec 31 |
| 6 | Reconcile equipment and vehicle asset accounts | Fixed Assets | Dec 31 |
| 7 | Amortize prepaid insurance balance to correct expense | Prepaids | Dec 31 |
| 8 | Confirm cleaning supplies inventory balance (physical count) | Inventory | Dec 31 |
| 9 | Write off any uncollectable AR as bad debt | AR | Dec 31 |
| 10 | Review and write off stale accounts payable (30+ days old items not owed) | AP | Dec 31 |
| 11 | Confirm payroll tax liability account balance matches amounts owed | Payroll | Dec 31 |
| 12 | Confirm all Q4 941 deposits are current (EFTPS) | Payroll | Dec 31 |
| 13 | Reconcile deferred revenue (prepaid client contracts) | Revenue | Dec 31 |
| 14 | Record odometer readings for all business vehicles (year-end) | Vehicles | Dec 31 |
| 15 | Compile full-year mileage log for each vehicle | Vehicles | Dec 31 |
| 16 | Confirm owner draw/distribution amounts are properly recorded | Equity | Dec 31 |
| 17 | Confirm equipment purchases qualify for Section 179 (placed in service by 12/31) | Tax Planning | Dec 31 |
| 18 | Confirm tax savings account balance for Q4 estimated taxes | Tax Planning | Jan 15 |
| 19 | Compile list of all vendors paid $600+ (for 1099-NEC) | 1099 | Jan 15 |
| 20 | Verify vendor W-9s on file for all 1099 recipients | 1099 | Jan 15 |
| 21 | Process W-2s through payroll provider | W-2 | Jan 31 |
| 22 | Distribute W-2s to all employees (mail or digital) | W-2 | Jan 31 |
| 23 | File 1099-NEC with IRS (Copy A) and send to recipients (Copy B) | 1099 | Jan 31 |
| 24 | File Q4 Form 941 (federal payroll tax return) | Payroll Tax | Jan 31 |
| 25 | Send year-end financial package to CPA (P&L, balance sheet, trial balance) | Tax Prep | Feb 15 (recommended) |
Critical Year-End Items Explained
Depreciation Entries (Task 5)
If you purchased equipment during the year and plan to use Section 179 or bonus depreciation, you must have placed the equipment in service by December 31. "In service" means the equipment is ready and available for use in your cleaning operations — not just ordered or paid for.
Record the annual depreciation journal entry for each depreciable asset:
- Debit: Equipment Depreciation Expense (Account 61000)
- Credit: Accumulated Depreciation — Equipment (Account 15300)
Your CPA typically provides the depreciation schedule after reviewing your asset list.
Cleaning Supplies Inventory (Task 8)
Do a physical count of supplies on hand as of December 31. This establishes your ending inventory balance, which affects COGS: > COGS = Beginning Inventory + Purchases − Ending Inventory
If you have $4,200 in supplies on December 31 and your books show $3,800, enter an adjusting entry to bring the balance to $4,200.
Section 179 Equipment (Task 17)
For any equipment purchased during Q4, confirm it is physically in your possession and operational by December 31. A vacuum ordered November 30 and shipped December 28 must be unpacked, set up, and available for use by December 31 to qualify for Section 179 in the current tax year.
What to Send Your CPA for Tax Preparation
By February 15, send your CPA:
- QuickBooks P&L (January 1 – December 31, accrual basis)
- QuickBooks Balance Sheet (as of December 31)
- QuickBooks Trial Balance (as of December 31)
- Bank reconciliation reports (all accounts, December 31)
- Fixed asset list with purchase dates, cost, and depreciation method
- Vehicle mileage logs for all business vehicles
- List of all Section 179 equipment purchased in the year
- Payroll summary (total wages, FICA, workers' comp)
- Any K-1s from partnership or S-Corp interests
Operators who deliver a complete package by February 15 typically receive their tax returns before the March 15 S-Corp deadline or April 15 individual deadline — with time for last-minute tax planning decisions.
See Monthly Close Checklist for Cleaning Businesses for the monthly version of this process, and Bookkeeping for Cleaning Businesses for the full annual financial management framework.
Frequently Asked Questions
Which bookkeeping tasks actually have to be finished before December 31?
Seven items carry the December 31 date: reconciling every bank account, recording depreciation entries, confirming Section 179 equipment is in service, running a physical count of your supplies inventory, writing off receivables you will never collect, amortizing prepaid insurance, and confirming all payroll tax deposits are current. Section 179 is the one worth double-checking, since the confirmation is about equipment being in service rather than sitting on an invoice.
How much does a late W-2 or 1099 filing actually cost?
Penalties run $60 to $310 per form, scaled to how late the filing lands. Apply that to a cleaning company with 20 employees and late W-2 filing alone costs between $1,240 and $6,200 — before you count anything owed on 1099-NECs. Both sets share the same January 31 deadline: W-2s go to employees and the SSA, 1099-NECs to contractors and the IRS.
What belongs in the packet you hand your CPA?
Pull the annual P&L and Balance Sheet out of QuickBooks first, then add the trial balance, bank reconciliation reports, a fixed asset list showing purchase dates and depreciation method, vehicle mileage logs, the payroll summary, and any K-1s. Assembling all of it at once beats answering the same questions piecemeal over email in March.
Why does February 15 matter when the return isn't due until March or April?
Handing the package over by February 15 buys your preparer room to do tax planning instead of pure catch-up data entry. The S-Corp return comes due March 15 and the individual return April 15, so a mid-February delivery leaves several weeks of usable runway. Deliver later and planning time is the first thing that gets squeezed out.
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Opora editorial sources from BLS OEWS wage tables, ISSA-447 production rates, NCCI workers' compensation classifications, EPA List N, OSHA 29 CFR standards, and primary state regulatory filings. We don't recycle blog posts — we audit primary documents.
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