The last weeks of the year are when owners still have choices. This is not tax advice, but a checklist to bring to your accountant before December 31.
In this article
- Why year-end planning matters
- Meet your accountant in November
- Equipment and vehicle purchases
- Retirement contributions
- Payroll and contractor paperwork
- Clean up the books
- Chase open invoices
- Set next year's numbers
- Review your business structure
- Check estimated payments
- Frequently asked questions
- Frequently asked questions
Why year-end planning matters
Many service business owners only think about taxes in March, when most decisions can no longer change the result. The last weeks of the year are when you still have choices about equipment purchases, payroll, retirement contributions and records. This is not tax advice. It is a checklist to bring to your accountant before December 31.
Meet your accountant in November
Ask for a projection of your taxable income for the year. Knowing roughly where you will land lets you make decisions while there is still time to act on them.
Keep reading — free
The rest of this article is worth the 20 seconds
Tell us where to send it and the full piece unlocks right here, along with everything else on this blog.
Rather just talk? Message us on WhatsApp.
Equipment and vehicle purchases
Buying a truck or equipment you actually need may have tax effects depending on when it is placed in service and how it is depreciated. Your accountant can tell you whether timing a purchase makes sense for your situation. Never buy something just for the deduction.
Retirement contributions
Plans available to small business owners can reduce taxable income while building savings. Some must be set up before year-end, so ask early which options fit your business structure.
Payroll and contractor paperwork
- Confirm W-9 forms for every contractor you paid.
- Check employee addresses for W-2 forms.
- Review bonuses and when they will be paid.
Clean up the books
Reconcile bank and credit card accounts, categorize every expense and collect missing receipts. Clean books make filing faster and cheaper, and they show you the real profit of the year.
Chase open invoices
Unpaid invoices hurt cash flow going into the slow season. Send reminders in early December and offer easy payment options.
Set next year's numbers
Use the year's results to set prices, budgets and goals for the next one. The owner who closes the year with clear numbers starts January with a plan instead of a guess.
Review your business structure
Whether you operate as a sole proprietor, an LLC or an S corporation affects how you pay yourself and how much tax you owe. Year-end is a good moment to ask your accountant whether your current structure still fits the size of your business, since some changes take effect at the start of a new year.
Check estimated payments
Compare the estimated tax payments you made during the year with your projected tax. Paying too little can mean penalties, while paying too much ties up cash you could use in the slow season.
Price every call so it pays.
We help service businesses set clear policies, book better jobs and turn more calls into profitable work.
Frequently asked questions
When should a service business owner start year-end tax planning?
In November, with a projection of taxable income from your accountant. That leaves time to act on decisions about purchases, retirement contributions and payroll before December 31.