By Abhinav Chhabra, Ledger Brigade | Published October 2026

December is the busiest month for most small businesses, and the year-end close is easy to push into January. That's usually when problems appear: a missing 1099 vendor, a bank account that hasn't been reconciled since summer, or a tax-saving move that had to happen before December 31.

This checklist covers what an LLC owner should do before and just after year-end. It's split by how your LLC is taxed, because a single-member LLC, a multi-member LLC and an LLC taxed as an S corporation each have different steps.

First, know how your LLC is taxed

LLC type Default tax treatment 2026 return Due date
Single-member LLC Disregarded entity (Schedule C on your personal return) Form 1040 with Schedule C April 15, 2027
Multi-member LLC Partnership Form 1065, with a Schedule K-1 for each member March 15, 2027
LLC electing S corporation status S corporation Form 1120-S, with a Schedule K-1 for each owner March 15, 2027
LLC electing C corporation status C corporation Form 1120 April 15, 2027

If you're not sure which applies, check whether the LLC ever filed Form 2553 (S corporation election) or Form 8832 (entity classification election).

Part 1: Get the books right

  1. Reconcile every bank and credit card account through December 31. Every account, including the one you rarely use. Unreconciled accounts are the most common reason year-end numbers are wrong.
  2. Clear the "uncategorized" and "ask my accountant" accounts. Each transaction needs a proper category before the books can close.
  3. Separate personal and business spending. Personal expenses paid from the business account should be recorded as owner draws or distributions, not business expenses.
  4. Review accounts receivable. Chase overdue invoices, and write off any that are genuinely uncollectible.
  5. Review accounts payable. Make sure every bill received for 2026 is recorded, even if it's paid in January.
  6. Count inventory, if you hold any. Record the year-end count and adjust the books to match.
  7. Record fixed asset purchases. Equipment, vehicles and computers bought in 2026 need to be recorded so depreciation can be claimed.
  8. Reconcile loan balances to the lender's year-end statement, splitting each payment between principal and interest.
  9. Accrual-basis LLCs: record accrued expenses (wages earned but unpaid, interest, utilities) and any revenue earned but not yet invoiced.

Part 2: Owners, payroll and contractors

  1. Record owner contributions and distributions. Each member's capital account should show what they put in and took out during the year. Multi-member LLCs need this for accurate K-1s.
  2. S corporation LLCs: check owner salary. Owners who work in the business must be paid reasonable compensation through payroll before taking distributions. A year with low salary and large distributions is a common audit trigger.
  3. Verify payroll year-to-date totals against your payroll provider before the final December payroll, and confirm employee addresses for W-2s.
  4. Collect Form W-9 from every contractor now, not in January. You need the legal name and taxpayer ID to file 1099s.
  5. Know the new 1099 threshold. For payments made in 2026, Form 1099-NEC and 1099-MISC are generally required when you pay a contractor $2,000 or more in the year, up from $600. Payments by credit card or through platforms like PayPal are reported by the processor instead, not on your 1099-NEC. Some states set their own 1099 reporting thresholds, which may be lower than the federal $2,000, so check the rules in each state where you pay contractors.
  6. Plan to e-file. If your LLC files 10 or more information returns in total (W-2s and 1099s combined), the IRS requires them to be filed electronically. Paper filings above that limit can attract penalties.

Part 3: Tax moves before December 31

Some decisions only count if they happen by year-end. Talk to your tax adviser before acting, but review these:

  1. Equipment purchases. Assets bought and placed in service by December 31 can generally be deducted in full for 2026 through bonus depreciation or Section 179, instead of over several years.
  2. Small purchases. Items costing $2,500 or less per invoice or item can usually be expensed immediately under the de minimis safe harbor, if you make the election on your return.
  3. Retirement contributions. If you plan to use a Solo 401(k), the plan must generally be set up by December 31 for employee deferrals. A SEP-IRA can be opened and funded later, up to the return due date.
  4. Cash-basis timing. Cash-basis LLCs can sometimes reduce 2026 income by paying deductible expenses before December 31, or increase it by invoicing earlier. Only shift timing when it makes business sense.
  5. Estimated taxes. The fourth-quarter 2026 estimated tax payment is due January 15, 2027. Review it against your actual year-to-date profit.

Part 4: Compliance and admin

  1. State annual reports and franchise taxes. Many states require an annual LLC report or fee, with deadlines that vary by state. Missing one can put the LLC out of good standing.
  2. Sales tax. Check that every state where you have sales tax obligations has its final 2026 return scheduled.
  3. Registered agent and business licenses. Confirm renewals so nothing lapses in the new year.
  4. Beneficial ownership (BOI) reporting. Under FinCEN's March 2025 interim final rule, US-formed LLCs are currently exempt from filing BOI reports. Foreign entities registered to do business in the US may still need to file. Check for updates, as this rule has changed several times.

Key 2027 deadlines for the 2026 tax year

Deadline What's due
January 15, 2027 Q4 2026 estimated tax payment
February 1, 2027 W-2s to employees and the SSA, 1099-NEC to contractors and the IRS, Form 941 (Q4) and Form 940
March 15, 2027 Form 1065 (multi-member LLCs) and Form 1120-S (S corporation LLCs), with K-1s to members
April 15, 2027 Form 1040 with Schedule C (single-member LLCs) and Form 1120 (C corporation LLCs)

January 31, 2027 falls on a Sunday, so the January deadlines move to Monday, February 1. Extensions are available for income tax returns, but not for W-2s and 1099-NEC, and an extension to file is not an extension to pay.

Frequently asked questions

When should an LLC start its year-end close? Ideally in early December. Reconciliations and W-9 collection can be done before year-end, which leaves January for final adjustments and filings.

Does a single-member LLC file its own tax return? Not by default. A single-member LLC is usually a disregarded entity, so its income and expenses are reported on the owner's Form 1040, Schedule C.

What is the 1099 threshold for 2026 payments? $2,000 per contractor per year for Form 1099-NEC and 1099-MISC, for payments made in 2026.

Can I take money out of my S corporation LLC without paying myself a salary? Not safely. Owners who work in the business should receive reasonable compensation through payroll before taking distributions.

Do US LLCs still need to file a BOI report? Under FinCEN's current rules, US-formed LLCs are exempt. Foreign companies registered in the US may still need to file.

Partnership or S corporation return running late? See what the IRS charges per owner, per month with our free late Form 1065 / 1120-S penalty calculator.

Want your year-end close handled?

Ledger Brigade closes the books for US small businesses every month, so year-end is a review rather than a rescue. We work in QuickBooks, Xero and Gusto, and we can prepare your reconciliations, 1099s and a year-end package for your CPA.

Email hello@ledgerbrigade.com or book a briefing to plan your 2026 close.

What's the one year-end task you always leave until January? Tell us in the comments.

This article is general information, not tax or legal advice. Rules can change and every business is different, so check with your tax adviser before acting.