An Accountant’s Year-End Checklist for the Childcare Business Owner

As the year draws to a close, your childcare year-end accounting checklist deserves the same attention you give to enrollment, staffing, and tuition collections. In the guide that follows, the Honest Buck Accounting team has compiled an actionable year-end checklist for childcare business owners. First, read through every section. Next, tackle the items in any order that fits your week.

A CPA’s Childcare Year-End Accounting Checklist

Treat the items below as a focused list of tasks to complete before the calendar flips. The goal is not to add to the overwhelm. Instead, by clearing each one, you set yourself up for a smoother transition into the new year and a calmer tax season.

Run Year-End Financial Reports

Start with reports. Pull your Income Statement (Profit & Loss), Balance Sheet, and Statement of Cash Flows for the full year. If you have stayed current on monthly reporting, this step takes minutes rather than days. For a deeper look, our guide to building a financial dashboard for your childcare business walks through what to track month after month.

In addition, reconcile every bank account and credit card account before year-end. Then schedule time with your CPA to review the reports together. As a result, you walk into tax prep with clean numbers and a clear story about the year.

Clean Up Your Vendor Lists

Next, scrub your vendor list inside QuickBooks Online or your accounting software. Update contact information, archive vendors you no longer use, and attach a vendor to every expense. This single habit makes 1099 filing in January dramatically easier.

File Year-End Tax Documents

Even though business tax returns are not due until mid-April, several payroll and information returns must be filed by the end of January. Below are the forms most childcare business owners need to know.

• Form W-2 – As the owner, you must file Form W-2 for every employee. The form reports the wages you paid and the taxes you withheld. The IRS publishes current Form W-2 instructions each year.
• Form 1099-NEC and Form 1096 – If your childcare business paid any non-employee contractor $600 or more during the year, you must file a Form 1099-NEC for each. Form 1096 is the transmittal cover sheet if you file the 1099s on paper. The IRS posts the official Form 1096 instructions annually.
• Form 941 – This is your quarterly payroll tax return for Social Security, Medicare, and federal income tax withholding. The fourth-quarter return is due January 31. See the IRS Form 941 page for the latest version.
• Form 940 – This is your annual Federal Unemployment (FUTA) return, also due January 31. The IRS Form 940 page covers thresholds and credit reductions.
• Form 1095-C – This one applies only if you are an Applicable Large Employer (50 or more full-time equivalent employees). If you have a self-insured plan and fewer than 50 FTEs, you file Form 1095-B instead. Most small childcare businesses are not required to file either, but check with your CPA.

Remember, it is your responsibility as the owner to file the right forms for the right people. Reach out to your accountant if you have questions about which forms your childcare business needs to file.

Update Employee and Payroll Information

Year-end is the right time to refresh employee records. First, confirm that every team member’s address, W-4 status, and direct deposit details are correct. If you run payroll through Gusto, this takes a couple of clicks per employee.

Next, audit access. Who still has login credentials to your accounting software, payroll system, parent management software, or shared drives? Remove access for anyone who has left. Meanwhile, document who owns what.

Then turn to raises and bonuses for next year. Decide on adjustments now so you can build them into your 2027 budget before January hits. Our guide to creating a bonus structure that works can help you make the call. As needed, reach out to your accountant for advice on the tax and cash-flow impact of payroll changes.

Identify Staffing and Outsourcing Needs

Take stock of where your team stands. Do you need to hire another lead teacher, an assistant director, or an admin? Could any back-office tasks be outsourced — bookkeeping, payroll, or HR support? Either way, decide now and plan the cost into your budget.

Identify Other Business Needs

Beyond staffing, think about software upgrades, major equipment, facility renovations, or curriculum investments for the year ahead. For example, a new playground, an HVAC overhaul, or a switch in childcare management software all carry tax and cash-flow consequences. Talk with your CPA about capital improvements before you sign anything. Consolidating your childcare tech stack is also a useful exercise here — fewer overlapping tools means lower monthly costs and cleaner data.

Audit Your Business Website

Your website is the online face of your childcare business. Walk through it as if you were a parent shopping for care. Are your hours, tuition information, staff bios, and contact details current? Do all the links work? Have you replaced photos of children who have aged out? Check in with whoever maintains the site and confirm plugin and theme updates are current. Then do the same pass on your social media profiles.

Back Up Your Digital Devices

Finally, back up everything. Even if your data syncs to the cloud, keep a separate offline copy of critical files. A second backup protects you from ransomware, accidental deletions, and sync failures. If it has been more than a quarter, run a backup today.

Close the Year Strong with Your Childcare Year-End Accounting Checklist

A focused childcare year-end accounting checklist is one of the simplest gifts you can give your future self. Clean books, accurate payroll filings, current employee records, and a fresh budget mean fewer surprises in tax season and a calmer start to the new year. For more big-picture context, our overview of the important KPIs to track for your ECE business and how to pay yourself as the owner are worth a read while year-end is on your mind.

Wishing you a happy new year from all of us here at Honest Buck Accounting. If you would like a CPA in your corner as you close the books and plan for the year ahead, get in touch with our team.