Gather every statement for the full tax year
Start by pulling every monthly statement for each account you used for business: checking, savings, credit cards, and any payment platforms like PayPal or Stripe. For a calendar-year filer, that usually means January through December statements, plus the December statement from the prior year if it captures late-month transactions that cleared in January.
Download the statements as PDFs directly from your bank's online portal rather than relying on paper. Most banks keep 12 to 24 months available online; anything older may require a request to the bank, so check early. Save each file with a consistent name like 2024-03-checking.pdf so they sort in order.
Do not forget accounts you opened or closed mid-year. A closed account still generated deductible expenses or taxable income, and a missing month is the kind of gap that creates problems later.
Turn PDFs into data you can sort and total
A PDF is fine for reading, but it is hard to add up. To categorize expenses and reconcile income, you want the transactions in a spreadsheet where each row has a date, description, and amount. From there you can sort by date, filter by vendor, and total each category.
You can type transactions in by hand, but that is slow and error-prone across a full year. Converting the PDF to Excel or CSV keeps the original figures intact and lets you work with them. Once the data is in columns, add a category column and tag each transaction: office supplies, software, meals, travel, and so on.
Watch for duplicates when you combine accounts. A transfer from checking to a credit card, or a payment that shows on both a platform and your bank, can be counted twice. Reconcile transfers so they net to zero rather than inflating your income or expenses.
Categorize with your tax return in mind
Match your categories to the lines on the form you file. A sole proprietor filing Schedule C, for example, has specific expense buckets: advertising, contract labor, supplies, utilities, and more. Aligning your spreadsheet columns to those lines makes the final numbers a copy-and-paste job.
Separate personal and business spending clearly. If you used one account for both, flag every business transaction so the personal ones do not end up in your deductions. Mixed accounts are common for small businesses, but they demand careful line-by-line review.
Keep a note of anything unusual: large one-off purchases, refunds, owner draws, or loan proceeds. These are not always income or expenses in the tax sense, and a short note now saves a confusing conversation with your accountant later.
Hand off clean files to your accountant or software
Most accountants prefer a spreadsheet or CSV over a stack of PDFs because they can sort and total it immediately. Send both: the organized spreadsheet plus the original PDF statements as backup so figures can be verified against the source.
If you use accounting software, you can often import transactions directly. QuickBooks, Xero, and Wave accept CSV imports where you map columns to date, description, and amount. Some banks also offer OFX, QFX, or QBO files that import with categories already structured. Check which format your software expects before you start, since the mapping step differs slightly for each.
Keep the originals. The IRS generally expects you to retain supporting records for at least three years after filing, and longer in some situations. Store the PDFs and your working spreadsheet somewhere backed up so you are not re-downloading statements next year.