The Simple January Tax Checklist Everyone Should Follow
- Lauren Twitchell
- Jan 2
- 5 min read
January is a quiet month for taxes—and that’s exactly why it matters.
There are no filing deadlines breathing down your neck yet. Forms are still arriving. The IRS isn’t actively chasing most people. And because of that, January is when many taxpayers do… nothing.
That’s a mistake.
From inside the IRS, January is where a lot of future tax problems quietly start—not because people are doing anything wrong, but because they delay simple, foundational steps that make the rest of tax season harder than it needs to be.
The goal of January is not to file your return.
The goal of January is to get organized enough that filing becomes calm and accurate later.
This checklist walks you through what actually matters in January, in plain English, whether you’re:
A W-2 employee
Self-employed
A small business owner
Or a mix of all three
No fluff. Just a simple, realistic checklist you can actually follow.
First: What January Is (and Isn’t)
January is not the month to:
Rush to file
Guess at numbers
Panic about refunds
React to social media tax advice
January is the month to:
Gather information
Close out the prior year
Catch errors early
Set yourself up for a smooth filing season
Think of January as tax prep without pressure.
Step 1: Create a Dedicated Folder for the Tax Year
This sounds basic—but it’s foundational.
Before you touch numbers, create a single place where all tax-related documents for the prior year will live.
Do this:
Create a digital folder labeled with the tax year (e.g., “2024 Taxes”)
Inside it, create subfolders such as:
Income
Bank Statements
Expenses
Mileage
Assets
Tax Forms
IRS Notices
If you prefer paper, a physical folder works too—just be consistent.
The goal isn’t perfection. It’s retrieval.
Step 2: Gather All Income Documents (But Don’t File Yet)
January is when income documents begin arriving—but not all of them arrive at once.
Common income documents:
W-2s
1099-NEC / 1099-MISC
1099-K
Interest and dividend statements
Platform summaries (Etsy, Stripe, PayPal, Square, etc.)
January rule:
Collect, don’t rush.
If you expect a form and it hasn’t arrived yet, make a note. Filing before all income is accounted for is one of the most common—and avoidable—mistakes.
Remember: the IRS matches your return against these documents later.
Step 3: Download Prior-Year Bank and Credit Card Statements
Whether you’re self-employed or not, bank statements matter.
In January, download:
All prior-year bank statements
All business credit card statements
Payment processor monthly summaries (if applicable)
Why January matters:
Statements are easy to access now
Nothing is archived yet
You can reconcile calmly instead of scrambling later
Even if you use bookkeeping software, statements are the source documents the IRS relies on if questions arise.
Step 4: Close Out the Prior Year in Your Books
January is when last year should be closed, not forgotten.
If you keep books (Excel, software, or otherwise), this is the month to:
Finish categorizing transactions
Reconcile bank accounts
Identify uncategorized or questionable items
Correct obvious errors
You don’t need to be perfect—but you do need to be consistent and reasonable.
From the IRS perspective, a closed, reconciled year carries far more credibility than a rushed one.
Step 5: Finalize Mileage Logs (If You Use Your Vehicle)
Mileage deductions are one of the most common audit problem areas—and January is your last clean chance to get this right.
Before the year fades:
Finalize total business miles
Confirm dates, purposes, and totals
Save or export your mileage log
What doesn’t work:
Guessing later
Recreating from memory
Estimating “what sounds right”
The IRS expects contemporaneous records—not reconstructions.
Step 6: Review IRS Mail You May Have Ignored
January is not the month to pretend IRS mail doesn’t exist.
If you received:
Balance due notices
Math error notices
Identity verification letters
Prior-year correspondence
Now is the time to:
Read them carefully
Understand what they mean
Determine whether action is required
Many tax issues escalate simply because notices are ignored—not because the original issue was severe.
Step 7: Pull Last Year’s Tax Return
Your prior-year return matters more than most people realize.
In January, review:
Filing status
Income types
Carryforward items (losses, credits, depreciation)
Payment history
Any adjustments or amendments
Why this matters:Tax returns connect year to year. January is when you catch inconsistencies early—before they snowball.
Step 8: Identify What Changed This Year
January is the perfect moment for reflection—not filing.
Ask yourself:
Did I start or stop a business?
Did income change significantly?
Did I move?
Did filing status change?
Did I add dependents?
Did I buy or sell assets?
Did I change how I get paid?
Changes don’t mean problems—but they often mean additional documentation is needed.
Step 9: Check Estimated Tax and Withholding (Quiet but Important)
January is when people realize—sometimes too late—that withholding or estimated taxes didn’t line up with reality.
In January:
Review what was paid during the year
Identify gaps
Prepare emotionally (and financially) for possible balances due
This isn’t about judgment. It’s about awareness.
Surprises hurt less when you see them coming.
Step 10: Decide How You’ll File (Before You Need To)
January is the time to choose your filing approach—not March.
Decide:
DIY or professional?
Same preparer as last year?
Do records need cleanup first?
Do you need help understanding notices or issues?
Waiting until deadlines loom limits options and increases stress.
Step 11: Do Not Rush to File Early
This deserves its own step.
January filing is rarely necessary and often risky.
Why?
Corrected forms are common
Late 1099s happen
IRS matching happens after filing
Amendments create more work—not less
Unless there’s a specific reason to file early, accuracy beats speed.
Step 12: Write Down Questions While You Think of Them
January clarity fades fast.
If you have questions like:
“Can I deduct this?”
“Why did income look different this year?”
“What do I do about this notice?”
Write them down now—while the year is fresh.
Good questions early prevent bad assumptions later.
What January Is Really About
January tax prep isn’t about forms.
It’s about:
Organization
Awareness
Accuracy
Calm
Most tax season stress isn’t caused by the IRS.
It’s caused by scrambling.
January is how you stop scrambling before it starts.
Final Thought: Calm Is Built in January
Tax season stress doesn’t magically appear in April.
It’s built—or avoided—starting in January.
When you:
Gather documents early
Close the prior year properly
Review notices calmly
Avoid rushing
Ask questions before deadlines
Tax season becomes manageable instead of overwhelming.
At Zero Fluff Books, this is exactly where we help most—helping people use January well so the rest of the year doesn’t feel like damage control.
No panic.
No guessing.
No fluff.
Just a simple checklist that actually works.
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