What is the reason for tithing settlement and does it have anything to do with tax purposes? Why at the end of the year and not some other time?
I would imagine that there are two main purposes for tithing settlement. One, it gives the donor the opportunity to review his contributions and verify that they are correctly recorded. At the same time he can review all of his personal statistics to verify that they are also correct. The other main purpose would be to declare to the bishop whether the person is a full tithe payer or not. That is important information for the bishop to know. Many blessings from the Lord are dependent on whether a person is a full tithe payer or not–for instance, that is one of the conditions that is a requirement to obtain a recommend to enter the temple.
The reason that tithing settlement is held at the end of the year is because that is the traditional time for the settlement of accounts. For instance, taxes are figured on annual income corresponding to the calendar year. Since tithing is a tax-deductible voluntary contribution to a religious organization, it is exempt from income taxes. Thus the end of the year is a logical time for tithing settlement as it relates to income taxes. From the information confirmed at tithing settlement the bishop will issue to the donor a statement of the annual tithing amount that can be used as documentation for contribution verification on the income tax return.