Tax season is a lot like a surprise health inspection: technically not a surprise, but it still feels that way if you have not prepared. For restaurants, the pain usually comes from one thing: disorganized information. Your CPA can only work with what you hand them. If it is incomplete, late, or messy, you pay for it in time, stress, and sometimes penalties.

This isn’t a how-to-file-your-taxes guide. It’s a practical checklist of what to organize in advance so your accountant can move fast, ask better questions, and help you legally minimize what you owe.

Think of it as mise en place for your books.

1. Make sure your books for the year are actually closed

Before you start pulling fancy reports, confirm the basics: is last year’s bookkeeping done?

At minimum, you want:

• All bank and credit card accounts reconciled through year-end.
• All deposits recorded and categorized (sales, loans, owner contributions, etc.).
• All expenses entered and reasonably categorized (COGS, labor, rent, utilities, repairs, etc.).
• Any major one-off items clearly labeled (equipment purchases, buildout costs, legal fees, etc.).

If your books are behind, prioritize reconciling bank and credit card accounts first. That gives you a skeleton of what really happened cash-wise, even if some categories are still a bit fuzzy. Your CPA will do much better work with “mostly right but categorized simply” than with a year of missing transactions and guesswork.

If you’re using an accounting system like QuickBooks, Xero, or restaurant-focused platforms integrated with your POS, this is where you spend time cleaning, not reinventing.

2. Confirm your chart of accounts makes sense for a restaurant

If your chart of accounts looks like it was borrowed from a generic small business template, tax prep gets harder and performance analysis is useless.

You want a structure that:

• Separates food, beverage, and other COGS.
• Separates front-of-house and back-of-house labor where possible.
• Breaks out major fixed costs (rent, CAM, insurance, utilities, licenses).
• Clearly distinguishes repairs and maintenance from capital improvements.

You do not have to rebuild everything right before tax season, but you should at least:

• Clean up obviously mis-categorized expenses (wine in “office supplies,” anyone?).
• Flag any large, weird-looking entries you’re not sure how to treat.

Make a short list of “classification questions” for your CPA: things like “Is this new oven a full deduction or does it need to be depreciated?” or “Where should we classify our delivery platform fees?” That conversation is much faster when you’ve done some pre-sorting.

3. Organize your payroll and tip information

Payroll is one of the most sensitive pieces of your tax picture, especially in restaurants.

Make sure:

• Your payroll processor has correct, current information for all employees (names, addresses, Social Security/Tax IDs).
• All pay runs for the year have been processed and posted to your books.
• Tips, service charges, and any auto-gratuities are properly recorded and reported in your system.

You’ll want year-to-date reports that show:

• Total wages by employee and by type (regular, overtime).
• Reported tips and any allocated tips.
• Employer payroll taxes and benefits (if applicable).

Your CPA will need these to reconcile W-2s and ensure tip reporting and payroll taxes align with what is showing on your books.

If you changed payroll providers mid-year, gather reports from both systems. That switch is a common spot where totals go missing.

4. Gather your 1099-related information

If you pay non-employees for services (contractors, some entertainers, certain consultants, possibly some landlord or vendor situations depending on structure), you may need to issue Forms 1099. Your accountant will guide you on who qualifies, but you can make their life easier by preparing:

• A list of all non-employee payees with names, addresses, and Tax ID numbers (from W-9 forms).
• Total amounts paid to each during the year, broken out by type if needed.

If you did not collect W-9s upfront, this is your reminder to make that a standard part of onboarding any independent contractor. It is much easier to ask for a form before you’ve paid someone than to chase it down after year-end.

5. Inventory, COGS, and shrink: have your ending numbers ready

For tax purposes and for your own sanity, you’ll want a clean picture of:

• Beginning inventory for the year (or opening date if you’re newer).
• Purchases during the year.
• Ending inventory at year-end.

That’s what feeds your cost of goods sold calculation.

If you’re not doing a full physical count at the end of the year, strongly consider it. Even a simplified count on major categories (meat, seafood, liquor, wine, beer, dry goods) is better than guessing. It gives your CPA a defensible number and helps you see how well your theoretical food and bev costs match reality.

If you had any major write-offs (spoilage from an outage, inventory loss from a walk-in failure, theft, etc.), document those events with:

• Date, approximate value, and reason.
• Any supporting notes or photos you have.

Your accountant can advise on how those losses should be treated, but only if they know they exist.

6. Pull key documents and contracts into one place

Digging through old email chains and file folders is what makes tax prep feel endless. Spend an hour gathering the important documents your CPA will likely ask for so they’re all in one folder (physical or digital).

Typical items:

• Lease agreement and any amendments.
• Loan documents and year-end loan statements.
• Equipment purchase invoices for major items.
• Insurance policies (especially liability and workers’ comp) and proof of premium payments.
• Any grant, relief, or special funding documentation if you’ve received it in the year.

If you opened, expanded, or remodeled during the year, include construction contracts, buildout invoices, and any permits or fees you paid. Those often have tax implications around capitalization and depreciation.

7. Don’t forget sales tax and local obligations

Income tax is only one part of the picture. In many locations, you also have:

• Sales tax on food and/or beverage.
• Liquor-specific taxes or fees.
• Local business licenses and health department fees.

Make sure your sales tax filings and payments are up to date or at least reconciled. Your CPA does not want to discover during income tax prep that there’s also a lurking sales tax problem.

If you are behind on any of these, be upfront about it. It’s better to build a plan with your accountant than to let notices pile up in a drawer.

8. Make a list of questions and planned changes

Tax season is also your once-a-year “office hours” with a professional who sees a lot of restaurants. Don’t waste the time.

Before you meet or send your package, jot down:

• Any upcoming big decisions (new location, expansion, major equipment, ownership changes, new delivery channels).
• Any pain points from last year’s tax experience (“We got surprised by X,” “We didn’t understand Y”).
• Specific goals, like “We want to set aside for quarterly taxes more consistently,” or “We want cleaner books so we can actually read our numbers monthly.”

This gives your CPA context and usually leads to better advice than “here are my numbers, what do I owe?”

9. Package it like you respect their time (and your billable hours)

Once you have everything, spend a little time on presentation. You don’t need to be fancy; you just need to be clear.

For example:

• One folder or shared drive with subfolders: “Financials,” “Payroll,” “1099/W-9,” “Loans & Lease,” “Inventory,” “Other Docs.”
• A simple cover sheet or email that summarizes: revenue, number of locations, any big changes from last year, and anything unusual they should know upfront.

You are making it easy for your CPA to work efficiently. That tends to show up on your invoice.

Pulling it together

Tax season will never be fun, but it doesn’t have to be chaotic. If you close your books, organize payroll and 1099 information, document inventory and big events, and gather your key contracts and statements, you walk into that conversation with real control.

Block a couple of sessions on the calendar with your manager or bookkeeper, treat them like important prep time, and get your financial mise en place together before you hit “send” to your CPA. Future you – and your spring cash flow – will be a lot less stressed.