Year-end can be an extremely busy time for business owners. Between all the regular life holiday crazies, it’s also often the time of year that people are pushing for their yearly sales goals, wrapping up their client work, and somehow finding the time to start preparing for next year. 

In the midst of it all, however, two critical areas often go overlooked… and they’re two things that are SUPER important not to miss!

The two things in question? Taxes and contracts. 

And I know what you might be thinking… UGH! The two most boring things ever. 

Sure, while they might not be the most fun thing about business ownership, they are indeed two of the things that keeps your business running in a legal way.

The good news is that neither of these areas have to be confusing or overwhelming. In this blog post specifically, I’m sharing an essential year-end tax to-do list for business owners so you can be fully prepared before tax season even gets here. 

But if you’re in need of contract help, I talk about the quarterly contract audit that I recommend HERE that’s perfect to conduct at year-end. 

The Essential Year-End Tax Checklist For Business Owners

Now, I want to preface this by saying, I’m NO tax professional and will never pretend to be. I’m simply one of you – a business owner myself who also unfortunately has to dedicate some of my time to taxes. 

But I’m also a practicing lawyer, so while I may not know the ins and outs of all tax situations, I DO know that not paying attention to your taxes can land you in legal trouble, which is what I ultimately help people avoid. 

With this year-end tax checklist, you can make sure that your business stays in compliance and that you meet all deadlines so you don’t have to deal with any legal headaches. 

✔️Review Your Financial Records

Tax season will be here before you know it and the best way to prepare for that dreaded time of year is review your financial records. As a business owner, you would ideally be using a bookkeeping software to help you keep up with your income, expenses, and deductions and make sure they are accurately recorded.

If you’ve been inconsistent with bookkeeping, NOW is the time to clean up your records. And if it feels too far gone, working with a professional to help you might be a good move!

✔️Maximize Tax Deductions

Don’t hear what I’m NOT saying here. As a business owner, you never want to fabricate deductions. What I AM saying is to simply take advantage of the legitimate tax deductions that are specific to your business. 

These may include office expenses, such as rent or supplies, technology or equipment, like computers, software, or other tools purchased for business use, professional service fees paid to consultants, accountants, lawyers, etc, and even travel and meals as long as they’re TRULY business related (psst: the daily coffee you HAVE to have doesn’t count 😉).

If you’re planning significant purchases, making them before December 31 can increase your deductible expenses for the current year.

✔️ Plan for Estimated Taxes

For many business owners, it’s a requirement to pay quarterly estimated taxes, so hopefully you know what’s required of you and do things accordingly throughout the year.

If you haven’t, now’s the time to ensure your payments are up-to-date to avoid penalties. If you anticipate higher-than-usual profits, adjust your final quarterly payment accordingly!

✔️Evaluate Your Tax Strategy

In the midst of getting your tax ducks in a row, it’s smart to go ahead and work with a tax professional before year-end to discuss potential strategies to minimize your tax burden. 

Many business owners simply don’t know what’s available to them, so working with a professional can help you make the most of your options. 

Common examples include retirement contributions, charitable donations, or carryforward deductions if applicable. 

✔️Organize Tax Documentation

And lastly when it comes to preparing for tax season, it’s wise to go ahead and gather all necessary tax documents, including W-2s or 1099s for employees and contractors, receipts for deductible expenses, and records of income received.

This preparation will make filing taxes smoother and reduce stress when deadlines approach!

Overall, taking the time to focus on your business’s tax responsibilities can save you from headaches down the road. 

Proactively addressing these tasks NOW not only helps you stay compliant with tax laws but also positions your business for greater financial success in the year ahead! With the right preparation and guidance, you can confidently close the books on this year and step into the new one with a clear financial foundation.

And P.S. If you’re looking for trusted tax, accountant, or bookkeeping professionals to have in your corner, my favorites are: Finolve Accountants & Advisors, Pretty Penny Accounting, and Maranucci & Associates.

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