Is your business ready for tax season, or are you planning to deal with it “sometime in January”?
If that sounds familiar, you’re not alone. Many business owners wait until the new year to think about taxes, and by then, some of the best opportunities to save money are already gone. The last few months of the year are your chance to get organized, reduce what you owe, and start the new year with confidence.
Here’s a checklist to help you finish the year strong.
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Get Your Books Up to Date
Before you can plan, you need to know where you stand. Make sure every transaction through the end of the year is recorded and categorized, and that your bank and credit card accounts are reconciled.
Tip: Review your Profit & Loss statement now. It will show whether you’re heading toward a profit or a loss, which shapes every decision below.
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Separate Business and Personal Expenses
Mixed-up personal and business spending is one of the most common problems we see. Go through your accounts and flag anything personal that ran through the business, or business expenses paid personally, so they can be recorded correctly.
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Review Your Estimated Tax Payments
If you make quarterly estimated payments, check whether what you’ve paid so far matches what you’re actually earning. If your income grew this year, you may need to adjust your final payment to avoid penalties.
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Consider Timing Your Income and Expenses
Depending on your situation, it may make sense to:
- Pay for planned expenses before December 31, such as supplies, software subscriptions, or equipment you already need
- Delay sending some invoices until January if you’d benefit from shifting income to next year
Talk to your accountant first. The right move depends on your income this year versus what you expect next year.
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Plan Your Equipment and Asset Purchases
Thinking about buying a new vehicle, computer, or equipment? Purchases placed in service before year-end may qualify for depreciation deductions this year. Just make sure the purchase makes sense for the business, not only for the tax break.
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Collect W-9s from Contractors
If you paid independent contractors this year, you’ll likely need to issue 1099 forms by January 31. Don’t wait until the last minute to chase down contractor information.
Do this now:
- Make a list of everyone you paid as a contractor
- Request a W-9 from anyone you don’t have one for
- Confirm names, addresses, and tax ID numbers are correct
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Review Payroll and Year-End Bonuses
Check that employee information is up to date before W-2s are prepared. If you’re planning year-end bonuses, decide on amounts early so they can be processed through payroll correctly.
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Maximize Retirement Contributions
Contributing to a retirement plan is one of the best ways to save for your future while lowering your taxable income. Review your options, such as a SEP IRA, SIMPLE IRA, or Solo 401(k), and note the deadlines, since some plans must be set up before year-end.
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Gather Your Receipts and Records
Mileage logs, home office information, receipts for large purchases, and loan statements all matter at tax time. Organizing them now saves you hours of stress later.
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Check Your Licenses and Compliance
Year-end is a great time to confirm your business licenses, workers’ comp coverage, and state filings are current, so nothing lapses in the new year.
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Set Your Goals for Next Year
Once you’ve reviewed this year’s numbers, use them to plan ahead. Set revenue goals, build a budget, and decide what you’d like to improve, whether that’s cash flow, pricing, or getting your books done monthly instead of all at once.
The Bottom Line
Year-end tax planning isn’t just about filing on time. It’s about keeping more of what you earn and heading into the new year organized and in control. The earlier you start, the more options you have.
Not sure where to begin? Let TeamCBK help. Our team can review your books, flag opportunities, and make sure you’re ready before the deadlines hit. Reach out today and let’s finish the year strong together! 💼✨
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