What are the most effective tax moves to make before December 31st?
Year-end tax planning is the process of legally shifting income or accelerating expenses to minimize your tax liability for the current year. Key strategies include Section 179 equipment expensing, maximizing retirement contributions, and implementing tax-loss harvesting within your business accounts.
Accelerated Deductions
Purchasing necessary equipment or paying upcoming bills in December to lower this year's taxable income.
Income Deferral
Strategic delays in invoicing until January to push tax obligations into the following fiscal year.
The Way Beyond Standard: We hold "Pillar 9" strategy sessions every October to ensure our clients have three full months to execute tax-saving maneuvers.
Year-End Tax Moves List
Maximize your savings before the December 31st deadline.
Tax planning isn't something you do in April—it’s something you do in December. By taking a few strategic steps before the year ends, you can significantly lower your taxable income and keep more cash in your business.
1. Prepay Upcoming Expenses
If you have predictable expenses coming up in January or February (like rent, insurance premiums, or software subscriptions), pay them in December. For cash-basis businesses, this pulls the deduction into the current year.
2. Equipment & Tech Upgrades
Under Section 179, you may be able to deduct the full purchase price of qualifying equipment or software bought and put into service by year-end. If you were planning to buy a new laptop or office furniture, do it now.
3. Max Out Retirement Contributions
Contributing to a SEP-IRA or Solo 401(k) is one of the most effective ways to reduce your Adjusted Gross Income (AGI) while simultaneously building your personal wealth.
Your December 31st Checklist
- Review Accounts Receivable: Send final reminders to clients. If a debt is truly uncollectible, write it off now.
- Check Your "Reasonable Salary": If you are an S-Corp, ensure your payroll for the year meets IRS "reasonable" standards.
- Account for Personal Funds: Did you pay for business items out of your personal pocket? Get those receipts into your bookkeeping system before the books close.
- Donate to Charity: Business charitable contributions can provide a nice deduction while supporting a cause you care about.
Master the New Standard
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