7 Key Year-End Tax Questions for Your Business

As the year draws to a close, it’s the right moment to take a careful look at your tax strategy. Making thoughtful decisions before December 31 can help reduce your tax burden, boost your cash flow, and set your business up for a strong start in the new year. Whether you operate as a one-person shop or oversee a growing team, reviewing these seven questions can help you uncover savings and streamline your financial approach.

1. Have I recorded every business expense?

Small purchases may seem insignificant in the moment, but together they can create meaningful deductions. Missing receipts or forgetting charges is easy, especially if you sometimes use personal accounts for work-related costs.

Before the year ends, take time to gather receipts, review credit card statements, and ensure nothing has slipped through unnoticed. Think about items like software subscriptions, business meals, courses or certifications, memberships, and mileage. If you work from home, a portion of your rent or utility bills may also count. A careful review now helps ensure that every allowable expense is captured when it matters most.

2. Should I make large purchases before December 31?

If you’ve been considering new equipment, updated technology, or even a company vehicle, timing can make a big difference. Section 179 and bonus depreciation rules often allow businesses to deduct all or part of the cost of certain assets immediately rather than over a long period.

Purchasing before December 31 can move those deductions into the current tax year, which may lower your liability. That said, it’s important to evaluate whether the investment supports your long-term goals rather than buying something simply for the deduction. Make sure each purchase contributes meaningfully to your business growth or efficiency.

3. Am I making the most of retirement contributions?

Retirement plans are not just for employees—they can be a powerful tool for business owners too. Options such as SEP IRAs, SIMPLE IRAs, and 401(k)s can help reduce taxable income while allowing you and your team to build long-term financial security.

If you haven’t revisited your contribution levels this year, now is an excellent time to do so. Increasing contributions before year-end can reduce your tax bill and strengthen your retirement outlook. Even small businesses and sole proprietors can benefit from maximizing these opportunities.

4. Do I need to review payroll and compensation?

The end of the year is a natural time to review how you compensate yourself and your employees. For S-Corporation owners, this includes verifying that your “reasonable salary” aligns with IRS expectations. Sole proprietors and partners should review their draws and evaluate whether their estimated tax payments reflect current earnings.

Addressing these items now can prevent unexpected tax issues later. It’s also a good opportunity to confirm that benefits, deductions, and bonuses are accurately reported before W‑2s and 1099s are distributed early next year.

5. Are there tax credits I might qualify for?

Tax credits can be particularly valuable because they reduce your tax bill directly. Many businesses qualify for credits without realizing it. Depending on your activities and industry, possibilities may include the Research and Development (R&D) credit, certain energy-related incentives, or the small business health care tax credit.

These programs are frequently updated, so it’s worth having your accountant take another look. Even smaller credits can create meaningful savings when applied to your final tax obligation.

6. Should I adjust my estimated tax payments?

Surprises during tax season are never welcome. If your revenue shifted this year—whether up or down—updating your estimated payments can help you stay on track and avoid penalties.

Review your current income, compare it to earlier projections, and account for any major shifts. An unexpectedly strong quarter might justify a higher payment, while a dip in revenue could signal that you should adjust downward. Taking time now to fine‑tune your numbers can keep your cash flow steady and predictable.

7. What should I expect for next year’s taxes?

While most year-end planning focuses on closing out the current year, it’s equally important to look ahead. Choices you make today can influence your tax situation in the year to come. Consider how upcoming changes—such as hiring, expansion, or anticipated equipment purchases—may affect your 2026 tax outlook.

Discussing these plans with your accountant can help you craft a smart strategy. They may suggest deferring income, accelerating certain deductions, or making other adjustments based on your expected activity next year. A proactive approach can support both immediate savings and long-term financial health.

Plan Ahead for a Strong Start

Successful business owners rarely wait until spring to think about taxes. By taking time now to review your finances, you can uncover overlooked deductions, identify credit opportunities, and make decisions that keep more money working for your business.

If you’re ready to talk through your year-end tax strategy or explore ways to strengthen your financial plan, reaching out before December 31 is a smart move. A bit of preparation today can lead to significant savings tomorrow—and help your business begin the new year with confidence.