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.

Use this workflow
1

Sales and Revenue Reconciliation

  1. Pull annual sales summary from POS
  2. Reconcile POS sales to bank deposits
  3. Export delivery platform 1099-K totals
  4. Reconcile sales tax remitted to state
    Collects list
2

Payroll and Tipped-Wage Compliance

  1. Pull year-end payroll register from provider
  2. Confirm W-2s issued by January 31
    Collects list
  3. Reconcile reported tips to allocated tips
  4. Verify tip-credit notices on file
  5. Calculate FICA tip credit (Form 8846)
3

Inventory and Cost of Goods Sold

  1. Conduct year-end count of food inventory
    Collects number
  2. Count liquor, beer, and wine inventory
    Collects number
  3. Export COGS report from MarginEdge or R365
  4. 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.

4

Fixed Assets and Depreciation

  1. 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
  2. Record asset disposals and trade-ins
  3. Update depreciation schedule with CPA
  4. 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.

5

Vendor 1099s and Compliance Filings

  1. 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.

  2. Confirm W-9 on file for each 1099 vendor
    Collects list
  3. File 1099-NEC forms by January 31
  4. Verify quarterly estimated tax payments
  5. 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.

6

Bank, Credit, and Merchant Reconciliation

  1. Gather all twelve monthly bank statements
  2. Reconcile credit card statements to ledger
  3. 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.

  4. Categorize loan interest and merchant cash advance fees
7

Deductions, Credits, and CPA Handoff

  1. 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.

  2. Document Work Opportunity Tax Credit hires
    Collects list
  3. Summarize repairs versus capital improvements
  4. Package documents for CPA delivery
    Collects file
  5. Owner sign-off on tax package
    Collects list Collects paragraph Collects signature