Direct answer
As of August 2026, a medical practice should begin year-end tax readiness before the final payroll and discretionary spending decisions. Reconcile the balance sheet, payroll, receivables, debt, fixed assets, owner activity, tax payments, and information-reporting data while there is still time to correct records and evaluate fact-specific planning.
Close the balance sheet before planning from profit
Reconcile cash, credit cards, receivables control accounts, payroll liabilities, tax accounts, debt, fixed assets, leases, prepaid items, accruals, and owner equity. Planning from an unreconciled profit-and-loss statement can produce the wrong decision.
Resolve payroll and owner transactions before the last payroll
Review shareholder-employee compensation, bonuses, benefits, retirement-plan data, reimbursements, distributions, contributions, and loans. Correct classifications through documented processes rather than unsupported year-end journal entries.
| Year-end area | Readiness evidence |
|---|---|
| Balance sheet | Completed reconciliations, support schedules, aging, debt statements, and explanations of old balances |
| Payroll | Registers, tax deposits, returns, owner compensation, benefits, bonuses, and year-end forms |
| Owner activity | Contributions, distributions, loans, reimbursements, related parties, and basis records |
| Fixed assets | Invoices, placed-in-service dates, disposals, business use, depreciation, and financing |
| Information returns | Vendor master, Forms W-9, payment classification, recipient statements, e-file acceptance, and corrections |
| Tax projection | Current books, filing history, estimated payments, state data, elections, open notices, and documented assumptions |
Prepare information returns and vendor data
Review payees, taxpayer identification, payment types, electronic-filing requirements, and recipient details. Resolve missing or inconsistent Forms W-9 before filing deadlines and retain filing acceptances and corrections.
Update the tax projection and action list
Coordinate expected income, deductions, asset purchases, depreciation, retirement funding, state exposure, estimated payments, credits, notices, and entity deadlines. The final plan should state assumptions, responsible parties, due dates, and items requiring legal, plan, valuation, or other specialist review.
Primary sources
Frequently asked questions
Is buying equipment at year end always a good tax strategy?
No. The practice should need the asset and evaluate cash flow, financing, placed-in-service timing, tax treatment, and the effect on other planning items.
Can bookkeeping cleanup wait until the tax return is prepared?
Waiting can limit correction and planning options. Reconcile material accounts and owner transactions before year end when practical.
Does a year-end review replace tax-return preparation?
No. The review prepares reliable facts and decisions; return preparation later applies final records, forms, elections, and current law.