The fourth quarter tends to be treated as a countdown toward tax season, a stretch for closing out payroll and gathering documents before the paperwork starts. At Boatright CPA, the months between October and December carry a different weight, since they’re the last real window to shape an outcome most people don’t think about until it’s already decided: this year’s tax bill. The decisions made during that window determine that number, well before anyone sits down to prepare the return in April, which is why the fourth quarter deserves its own season of year-end tax strategy.
What tax moves should business owners and individuals make before the end of the year?
For business owners, that starts with a look at how income lands before the year closes. A strong fourth quarter can push profit into a higher bracket, change what a business qualifies for, or shift the math on a purchase that was already being planned. Timing when income is recognized and when deductible expenses are paid, deciding whether year-end bonuses or distributions make more sense now or in January, and revisiting entity structure before another full year passes under the wrong one, are all decisions with a deadline built into the calendar: December 31. Individuals face a version of the same question. Selling an investment, exercising equity, or realizing a gain all carry different consequences depending on which side of the new year they land on. None of these calls should be made in isolation from the rest of a financial picture, which is why they’re worth working through with a tax advisor while there’s still time to adjust course.
What tax deductions are small business owners missing?
Plenty of the deductions that go unclaimed each year are ones a business already qualifies for, overlooked because an expense was paid from a personal account, never documented, or simply assumed not to count. A home office used regularly and exclusively for the business, business mileage on a personal vehicle, health insurance premiums for self-employed owners, and the software subscriptions, professional dues, and continuing education that keep a business running all fall into that category, as do startup costs for a newer business and the qualified business income deduction available to many pass-through owners. S corporation owners who cover business costs out of pocket can often be reimbursed through an accountable plan, turning an expense that would otherwise be lost into one the business can deduct.
The fourth quarter is the right time to catch these, while there’s still room to pull receipts, reconcile accounts, and make sure the year’s records reflect everything the business actually spent to earn its income.
What’s the deadline to set up a retirement plan for my small business to get a tax deduction?
Retirement contributions deserve the same attention while there’s still time to act on them. Business owners weighing a SEP IRA, solo 401(k), or cash balance plan have contribution decisions that interact directly with this year’s income, and some of those plans need to be established before the year closes even when the funding deadline itself stretches into the following spring. Employees still have a window to adjust how much comes out of remaining paychecks. Funding a retirement account does two things at once, building toward a future that’s still years off while meaningfully changing what’s owed for the year already in progress. Waiting until the return is being prepared to ask the question narrows the options to whatever is still available by then.
When should I meet with a CPA for year-end tax planning?
The best time to bring a CPA into year-end planning is before the bigger decisions are made, and growth moves are where that timing matters most, because they rarely stay contained to the year they happen in. Bringing on a partner, financing new equipment, opening a new location, or restructuring debt all carry tax consequences that extend into next year’s picture, sometimes for several years after that. Weighing those moves in October or November, while there’s still room to plan around them, gives a business owner options that no longer exist once the decision is made and the paperwork is filed, and keeps the numbers tied to the direction the business is headed.
The right time for these conversations is early, while the decisions still have room to move, which is the standard Boatright CPA holds itself to year-round. That’s what a real fourth-quarter planning conversation is for: the last stretch where this year’s numbers and next year’s plans are both still within reach. If your business or personal finances have shifted since your last tax conversation, or it’s simply been a while since anyone looked at the full financial picture together, contact Boatright CPA and get that conversation on the calendar while this year’s numbers can still be shaped into next year’s plan.