Year-End Business Compliance Checklist: What California Businesses Need to Know Before Closing the Books

Written By Allison Duffy

As we wrap up another year, it’s the perfect time for business owners to get organized, stay compliant, and prepare for a smooth tax season. Whether you’re a new entrepreneur or a seasoned business owner, year-end requirements can feel overwhelming — but with the right checklist, you can stay ahead of deadlines and avoid costly penalties.

Below is a comprehensive guide to the essential year-end tasks for California businesses, including 1099 filing, Statement of Information requirements, bookkeeping cleanup, and the increasingly important CalSavers retirement mandate.

1. Gather Vendor Information for 1099 Filing

If you paid any contractor $600 or more during the year, you must issue them a Form 1099-NEC.
Now is the time to ensure you have an up-to-date W-9 from each contractor.

Make sure you have:

  • Legal name

  • EIN or SSN

  • Mailing address

  • Email address

  • Business entity type

Why it matters:
Incorrect or missing information delays filing and increases the risk of IRS penalties.

DCI 1099 Preparation & Filing – Pricing

  • $75 for the first 1099

  • $35 for each additional form

  • Filing fees included

Service includes W-9 review, form preparation, IRS e-filing, state filing (if required), and electronic copies for your records.

2. Verify Your California Statement of Information

California requires most business entities to file a Statement of Information either annually (corporations) or every two years (LLCs).
This filing ensures that the state has current business details on record. You can check the status of your company here by searching your company name in the search box.

Before filing, confirm:

  • Registered agent

  • Principal business address

  • Manager/Member/Officer information

  • Business activity description

DCI Statement of Information Filing – Pricing

  • $125 flat rate

  • Filing fee included

This service includes preparing the form, verifying business details, filing with the Secretary of State, and providing confirmation for your records.

3. Organize and Update Your Accounting Records

Clean bookkeeping is the foundation of accurate tax returns and financial reporting. Before year-end, make sure your accounting system is up-to-date:

  • Reconcile all bank & credit card accounts

  • Categorize income and expenses

  • Review Accounts Receivable and Accounts Payable

  • Record owner contributions/distributions

  • Update loan balances and fixed asset purchases

Why it matters:
Organized books reduce tax prep time, prevent errors, and help identify planning opportunities.

4. Review Payroll and Contractor Payments

As the year closes:

  • Confirm payroll totals match your books

  • Verify employee addresses

  • Review contractor payments for 1099 accuracy

  • Record any bonuses or year-end adjustments

  • Double check any fringe benefits that need to be included in W2 (S corporation health insurance, personal use of company car, etc.)

This helps ensure compliance with both IRS and state reporting requirements.

5. Complete a Year-End Inventory Count (if applicable)

If your business sells products, a physical inventory count is essential. Make sure you are starting off the new year with clean numbers!
Accurate quantities allow for proper Cost of Goods Sold (COGS) calculation and inventory valuation.

6. Gather All Required Tax Documents

Start collecting the documents your tax professional will need:

  • Bank & credit card statements

  • Payroll reports

  • 1099s and 1098/1099-K forms

  • Loan statements

  • Asset purchases

  • Depreciation schedules (if applicable)

Having everything ready early speeds up the filing process and reduces stress.

7. Explore Year-End Tax Planning Opportunities

Before December 31st, consider:

  • Equipment purchases

  • Retirement contributions

  • Estimated tax adjustments

  • Entity structure review (LLC vs. S-Corp)

  • Deduction optimization

Proactive planning can minimize your tax liability and strengthen your financial position.

8. Understand Your California CalSavers Obligation

CalSavers is California’s mandatory retirement program for employers that do not already offer an employer-sponsored retirement plan.

Who Must Register?

You must enroll in CalSavers if:

  • You have at least one W-2 employee (including owners)

  • You do not offer a qualified retirement plan (401(k), SIMPLE IRA, SEP IRA, etc.)

Independent contractors do not count as employees.

Registration Deadline

The statewide rollout is complete.
All employers with 1 or more employees are currently required to register within 30 days of hiring their first employee.

Penalties for Non-Compliance

  • $250 per employee after 90 days

  • $500 per employee after 180 days

DCI CalSavers Registration Service – Pricing

  • $150 flat fee

This includes eligibility review, employer registration, payroll setup guidance, employee notifications, and compliance documentation.

Year-end is the ideal time to get organized, prepare for tax season, and ensure your business remains in full compliance with California requirements. Whether you need assistance with 1099s, Statement of Information filings, CalSavers registration, or year-end bookkeeping, we’re here to help.

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Allison Duffy
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