10 year-end tax moves for small business owners

Which moves make the biggest difference?

1. Run year-to-date numbers. You can't plan without reconciled books through October or November.
2. Compare this year with next. If next year's income will be higher, take income now. If lower, defer it.
3. Time your invoices. On the cash method, holding December invoices until January moves income forward.
4. Pay bills early. Cash-method businesses can often pay January bills in December, within limits.
5. Buy equipment you actually need. It has to be placed in service by December 31.
6. Fund retirement. Set up a solo 401(k) if you need one. Some deadlines fall on December 31, while others run to your filing date.
7. Check your S-Corp salary. Run payroll before year end. Late corrections are messy, and health insurance for owners needs to reach the W-2.
8. Run accountable plan reimbursements. Get home office and mileage paid before the year closes.
9. Plan your January estimate. It's due January 15. See our deadline calendar.
10. Collect W-9s now. You'll need them for January 1099s.

What should you not do?

Don't buy a truck to "save on taxes" if you don't need one. A $60,000 purchase might save $20,000 in tax, and you're still out $40,000. Don't stack deductions into a low-income year, when they're worth less. And don't try to backdate anything. Dates have to be real.

When should you start?

Start by mid-November. December's a poor time to find out your books are behind. If you've got big decisions, like a new entity or a switch to S-Corp status, start even earlier. Remember that an S-Corp election for next year is generally due by March 15.

What about next year's planning?

Once the year closes, set your estimated payments and owner pay for the new year. Then check for law changes. The 2025 tax law changed plenty, and January is when new limits land. A year-end planning review usually fits on one call, if your books are ready.