Restaurant Tax Preparation Checklist

Year-end tax prep workflow for an independent restaurant or small group. The GM or owner-operator runs this with the bookkeeper before handing the package to the CPA.

7 sections 31 steps Collects data

Sales and Revenue Reconciliation

Pull annual sales summary from POS
Reconcile POS sales to bank deposits
Export delivery platform 1099-K totals
Reconcile sales tax remitted to state

Collects list

Payroll and Tipped-Wage Compliance

Pull year-end payroll register from provider
Confirm W-2s issued by January 31

Collects list
Reconcile reported tips to allocated tips
Verify tip-credit notices on file
Calculate FICA tip credit (Form 8846)

Inventory and Cost of Goods Sold

Conduct year-end count of food inventory

Collects number
Count liquor, beer, and wine inventory

Collects number
Export COGS report from MarginEdge or R365
Reconcile theoretical to actual food cost
- Pull the variance report and flag any category over 2 points. Common drivers: spoilage from the walk-in, vendor-invoice short-counts, comp/void abuse, untracked staff meals. Document the reason for any variance the CPA will see.

Fixed Assets and Depreciation

List equipment purchases over $2,500
- Capture hood systems, walk-ins, ranges, ice machines, dish machines, POS hardware, and FF&E. Attach invoices and in-service dates so the CPA can apply Section 179 or bonus depreciation correctly.
Collects file
Record asset disposals and trade-ins
Update depreciation schedule with CPA
Document leasehold improvements completed
- Buildouts, ADA work, kitchen reconfigurations, and bar rebuilds qualify for Qualified Improvement Property treatment. Get the contractor invoices and certificates of occupancy into the file before the CPA asks.

Vendor 1099s and Compliance Filings

Pull vendor payment report by entity
- Filter for vendors paid $600+ via cash, check, or ACH (card and third-party platform payments are excluded — those go on 1099-K from the processor). Common 1099-NEC recipients: musicians, DJs, repair techs, cleaning crews, marketing freelancers, the linen service.
Confirm W-9 on file for each 1099 vendor

Collects list
File 1099-NEC forms by January 31
Verify quarterly estimated tax payments
Pull state and local tax account statements
- Sales tax, meals tax, liquor-by-the-drink tax, and any local restaurant or tourism tax. Some jurisdictions require an annual reconciliation return separate from monthly remittance.

Bank, Credit, and Merchant Reconciliation

Gather all twelve monthly bank statements
Reconcile credit card statements to ledger
Match merchant deposits to POS batches
- Daily POS batch totals minus processor fees should equal the bank deposit. Any unmatched batch is either a chargeback, a held deposit, or a reconciliation error — investigate before close.
Categorize loan interest and merchant cash advance fees

Deductions, Credits, and CPA Handoff

Compile employer-provided meals records
- Staff meals provided for the employer's convenience are typically 50% deductible (some are 100% under de minimis rules). Tally the cost using the recipe-cost method, not menu price.
Document Work Opportunity Tax Credit hires

Collects list
Summarize repairs versus capital improvements
Package documents for CPA delivery

Collects file
Owner sign-off on tax package

Collects list Collects paragraph Collects signature

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Sections 7

Steps 31

Category Restaurant

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