The year is winding down, which means you have a lot on your plate as a small business owner. From wrapping up projects to preparing for the holiday rush, there's no shortage of items on your to-do list. Even though this is the season of hustle and bustle, it's also an excellent time to take a careful look at your small business finances to make sure you're ready for tax season. With just a few proactive steps before December 31, you can strengthen your financial position and start out next year ahead of the curve.
Close the Books Before the Calendar Does
Your financial records tell the story of your business. Before the year ends, take time to review and reconcile all bank and credit card accounts. Verify that income and expenses are categorized correctly and make any necessary adjustments now rather than waiting until tax season.
If you pay vendors or contractors, confirm that all payments are recorded and prepare to issue 1099s early in the new year. Keeping digital copies of receipts and invoices is just as important. Myrick CPA's secure client portal makes it simple to share documents and ensure your files stay organized and compliant.
Make the Right Tax Moves While There's Still Time
The final quarter often presents opportunities to make smart financial decisions that reduce your tax burden. For some businesses, it makes sense to accelerate deductible expenses such as equipment purchases or professional fees. Others may benefit from deferring income until the next year. A CPA can help you determine which approach fits your situation best.
If you've had a strong year, review your estimated tax payments and retirement plan contributions. Maxing out contributions to a SEP, SIMPLE, or 401(k) plan can reduce taxable income while helping you build long-term savings.
Under the OBBBA, 100% bonus depreciation was made permanent. This removes the old phase-down schedule and allows businesses to plan for the long term. Any eligible equipment or technology purchased and placed in service before December 31 can be fully deductible this year, which gives you a practical tool for managing taxable income.
Review Payroll, Bonuses, and Compensation
Now is also the time to evaluate your payroll and year-end compensation decisions. Bonuses and raises must be issued by December 31 to count toward 2025 deductions. Review employee and contractor classifications to ensure accuracy when preparing W-2s and 1099s.
If you're a business owner who takes draws or guaranteed payments, a CPA can help you confirm your compensation structure is tax-efficient and compliant with IRS rules.
Plan for 2026 With a Fresh Financial Perspective
Once your 2025 books are in order, use the data to plan for the new year. A CPA can help you forecast income, review cash flow, and set achievable goals. If you anticipate changes in staffing, major purchases, or expanded services, mapping them out now will make for smoother execution later.
The OBBBA's permanent Qualified Business Income (QBI) deduction and bonus depreciation provisions create new opportunities for long-term planning. With these tools, business owners can make informed decisions about reinvestment, retirement planning, and overall tax strategy.
FAQs
When should I schedule a year-end review with my CPA?
Ideally, by mid-December. This leaves enough time to make adjustments and finalize year-end financials before the deadline.
Are year-end equipment purchases still deductible under OBBBA?
Yes. The OBBBA made 100% bonus depreciation permanent, so it is available for qualifying purchases made this year and going forward, not just as a temporary break.
What records should I keep for tax season?
Keep reconciled financial statements, payroll records, receipts, invoices, and documentation for major purchases or deductions.
Partner With Myrick CPA for a Confident Year-End
Year-end tax planning can feel overwhelming, but it doesn't have to be. Myrick CPA helps business owners across the country make sense of changing tax laws and stay financially organized.
Our virtual consultations and secure online portal make it simple to plan ahead, even during the busy holiday season. Schedule your year-end tax planning session before December 15, and step into 2026 with confidence knowing your business is fully prepared for tax season and beyond.
