Nonprofit Year End Checklist: What to Finish Before December 31
Year end is two months away. This is the best time to get your nonprofit books in order. A little work now saves you stress in January.
Here is a simple checklist. It follows the one from Brady Ware, a CPA firm. It has four parts: reminders, transactions, account reviews, and tax forms.
1. Year End Reminders
If you are a faith based group, set the ministers' housing allowances for the coming year.
Ask employees to review their W-4 forms. Some may need to change their withholding.
Tell donors to wait for their contribution summary before they file their taxes.
Send donors a statement with their current balance. Then ask for a year end gift.
Be careful with gifts to ministers, employees, or volunteers. Some of them can count as taxable income.
2. Year End Transactions
Record every gift that was received or postmarked by December 31 in the year you are closing.
Note any year end business expense reimbursements.
Enter all payroll, payroll taxes, retirement contributions, flexible spending, and insurance.
Make sure all revenue and expenses from before year end are recorded before you close the books.
Finish your normal month end close and bank reconciliation for the last months of the year.
Review your year end retirement plan reporting rules.
3. Review Your Accounts
Run your annual reports. Check that every account balances. Make adjustments. Then run the reports again and file them.
Confirm your bank balances.
Confirm your fund balances carried forward.
Make sure the people listed as account signers are still the right people.
Review your internal controls.
Prepare next year's budget.
Check your chart of accounts and your designated funds.
Make sure your insurance is enough.
4. Tax Forms and Due Dates
Form 1099-NEC is due by January 31.
Form 1099-MISC is due February 28 if you file on paper. It is due March 31 if you file online.
Donor contribution statements are due by January 31.
These dates come from the 2023 version of the checklist. Check the IRS website for the dates that apply to this year before you file.
Why This Matters
Most year end problems come from missed gifts, wrong cutoff dates, and books that were closed too fast. The December 31 gift rule is the one to watch the most. A gift that is postmarked on December 31 belongs in the year you are closing.
You do not have to do this alone. I have worked in accounting for 13 years. At Revamp Your Finances, I help nonprofits close their books, clean up their reports, and get ready for tax season.
Our firm gives you one month of free work so there is no risk to you.
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