By - January 6, 2026
Categories: Bookkeeping, Taxes
For auto repair shop owners, January isn’t just the start of a new calendar year. It’s a critical month for tax deadlines, payroll reporting, and year-end bookkeeping. Staying ahead of January’s compliance requirements can save your shop from penalties, missed deductions, and unnecessary stress during tax season.
If you want to keep your auto repair business financially healthy and audit-ready, these are the must-know tax deadlines and bookkeeping priorities for January 2026.
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W-2s and 1099-NECs Due January 31, 2026
One of the biggest tax deadlines for auto repair shops is the January 31 deadline for issuing W-2s and 1099-NECs. Whether you employ technicians or hire contract specialists, these forms are non-negotiable.
You must file and deliver:
- W-2s for all employees
- 1099-NECs for contractors paid $600+ in 2025
Late or incorrect forms can lead to IRS penalties ranging from $60 to over $300 per form, which adds up fast for small businesses.
To stay compliant:
- Confirm who is an employee vs. a contractor
- Make sure every contractor has a current W-9
- Review vendor payments early in January
- Verify payroll totals match year-end reports
Accurate W-2 and 1099 filing is one of the biggest steps toward keeping your auto repair shop audit-ready.
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IRS Opens Personal Tax Filing Window in Late January
If you’re a shop owner, your personal taxes and business taxes are often intertwined, especially if you’re a sole proprietor, an LLC, or an S-corp owner. Preparing early helps you maximize deductions and avoid last-minute stress.
Before filing opens, gather:
- Your 2025 profit and loss report
- A balance sheet
- Mileage or vehicle expense documentation
- Records of equipment purchases and repairs
- Payroll summaries
- Insurance and benefits information
- Any estimated taxes you already paid
Having these ready ensures you don’t leave money on the table when claiming deductions for tools, equipment, shop supplies, or vehicle use.
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Q4 Estimated Taxes Due January 15, 2026
Quarterly estimated taxes are one of the most commonly overlooked responsibilities for auto repair shop owners. If you expect to owe more than $1,000 in taxes for the year, the IRS requires you to make quarterly payments, and the final one is due January 15.
Paying Q4 estimated taxes on time:
- Helps you avoid underpayment penalties
- Smooths out cash flow
- Reduces the amount owed in April
- Keeps your auto repair shop compliant
Review your 2025 income and compare it to your previous payments so you’re not caught off guard.
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Year-End Bookkeeping Checks Every Shop Should Do Before Filing
Before you or your tax preparer submits anything, your books need to be accurate, reconciled, and complete. A clean set of books is the foundation of financial clarity and accurate tax filings.
Every auto repair shop should complete these checks in January:
- Reconcile all bank and credit card accounts
2. Confirm payroll totals match W-2 forms
3. Verify contractor payments for 1099 accuracy
4. Record all remaining 2025 expenses and deposits
5. Review loan balances and interest entries
These bookkeeping tasks help prevent errors on your tax return, avoid IRS letters, and ensure your financial reports reflect the true health of your shop.
Start 2026 With Financial Clarity, Not Confusion
January can feel overwhelming, but with the right bookkeeping support, your auto repair shop can stay organized, compliant, and prepared for tax season. Meeting these deadlines early sets you up for a stronger financial year, and gives you more time to focus on what you do best: serving your customers and growing your shop.
If you need help getting tax-ready, organizing your 2025 books, or filing W-2s and 1099s, Three Rivers Bookkeeping is here to make financial clarity simple.