Tax season is always demanding. For finance teams, the early months of the year often bring tighter deadlines, heavier workloads, and little room for error.
But 2026 is shaping up to be more challenging than usual.
Recent tax law updates, including new reporting requirements around employee overtime and compensation, are making the process more complex. The IRS is also operating with significantly less staff, which means response times may be slower.
For businesses, that combination has real implications. Being well-informed and prepared can make tax season run a lot more smoothly. And that’s where strong bookkeeping isn't just helpful — it’s essential.
Tax code changes and reduced staffing at the IRS
Several factors are contributing to the added complexity this year.
Erin Collins, the National Taxpayer Advocate, explained in her annual report that there have been more than 100 changes to the tax code this year.
This includes:
- Updated reporting stipulations around payroll, overtime, and compensation
- New forms and revised IRS guidance
- Additional software requirements
Finance teams will need to understand these changes and prepare for new forms, revised guidance, and updated software requirements. Records need to be clean and up to date.
Details like employee classifications, overtime calculations, and documentation standards should be consistent and well maintained throughout the year — rather than playing catch-up in March.
Added to this, the IRS has seen a considerable reduction in staff over the last year — with 27% fewer employees, including 22% fewer customer service representatives. There is concern that their capacity to deal with questions raised will be affected and processing timelines will be longer.
Where Businesses Typically Get Caught Out
Most tax-season issues don’t stem from major financial mistakes. More often, they arise from process gaps.
This typically shows up as:
- Payroll handled correctly but inconsistently documented
- Overtime calculated properly but categorized differently month to month
- Reconciliations falling behind during busy periods
- Year-end “catch-up” work instead of consistent monthly discipline
In many cases, accountants receive incomplete or inconsistent records and are forced to reconstruct information under tight deadlines. That reconstruction takes time. It also increases the likelihood of follow-up questions and amended filings.
These situations rarely reflect a lack of capability. They reflect workload pressure and competing priorities throughout the year. The result is longer preparation cycles, more back-and-forth, and avoidable strain on internal finance teams.
The Difference Between Accounting and Bookkeeping
When businesses think about tax season, they often focus on accountants. And rightly so — accountants play a critical role in advising, filing, and ensuring compliance.
But the foundation of every clean tax return is consistent bookkeeping.
Accountants focus on advising, filing, and compliance.
Bookkeepers maintain the day-to-day accuracy that makes filing straightforward.
Bookkeepers ensure:
- Transactions are categorized correctly
- Payroll and overtime are recorded consistently
- Accounts are reconciled monthly
- Documentation is organized and accessible
When bookkeeping is disciplined and up to date, accountants can focus on strategic advice and accurate filing rather than correcting inconsistencies.
In a year like 2026, that distinction matters even more.
Strengthening Your Bookkeeping Function for the Long Term
For many businesses, the challenge isn’t knowing what needs to be done. It’s having the capacity to do it consistently.
As companies grow, transaction volumes increase. Payroll becomes more complex. Reporting requirements expand. What once felt manageable with a small internal team can gradually become stretched.
Rather than expanding domestic headcount — with the associated recruitment timelines and employment costs — many businesses are strengthening their bookkeeping function through dedicated remote support.
With a full-time, embedded bookkeeper, businesses gain:
- Consistent oversight of payroll and overtime
- Up-to-date accounts payable and receivable
- Regular, disciplined reconciliations
- Clear and organized financial documentation
With a full-time, embedded bookkeeper, businesses gain experienced, qualified support with the specific skillset to oversee payroll, accounts payable and receivable, reconciliations, and financial documentation.
This approach offers long-term stability and ensures processes remain disciplined throughout the year. In a year where precision matters more, structural consistency makes a measurable difference.
It’s All About the Groundwork
Tax season will always bring deadlines. But consistent preparation means those deadlines don’t have to cause stress to finance teams.
When bookkeeping is accurate, up to date, and consistent, tax preparation becomes a structured process rather than a reactive one. Internal teams spend less time troubleshooting, communication with accountants is smoother and confidence in filings increases.
The businesses that navigate complex tax seasons most effectively are the ones maintaining bookkeeping discipline throughout the year — not the ones working the longest hours in March.
If you’re reviewing your finance function and considering how to strengthen your bookkeeping processes long term, it may be worth exploring what dedicated support could look like for your team.
When preparation is built into the system, tax season becomes manageable — even in more demanding years.
