Year-End Planning: Essential Tips to Keep Your Books Clean and Your Taxes Optimized

Year End can be a stressful time as you prepare your books for closing, consider employee bonuses, and plan for estimated tax payments.

Get Your Books Clean and Up to Date

Before you can plan effectively, your financials must be accurate.This means:

• Reconciling bank, credit card, and loan accounts

• Reviewing accounts payable and accounts receivable for accuracy

• Ensuring all expenses are categorized properly

• Verifying fixed asset purchases and depreciation schedules

• Catching up on any missing invoices or receipts

A clean set of books is the foundation for meaningful tax planning—and helps avoid unpleasant surprises when your return is prepared. SWAATT is here to malke sure this goes as it should. Give us a call if you currently have any hesitations or concerns about your year-end financial reporting.

Review Profitability and Estimated Tax Payments

Now is the time to evaluate how your business performed this year:

• Compare year-to-date income with prior years

• Assess whether estimated tax payments have been made timely

• Determine if an additional payment is necessary to avoid penalties

• Review owner draws or distributions

Proper estimation means fewer surprises and smoother cash-flow management going into tax season.

Maximize Deductions Before December 31

There are strategic actions you can take before year-end to reduce your taxable income. Consider:

• Purchasing equipment that qualifies for Section 179 or bonus depreciation

• Prepaying certain expenses such as rent, insurance, or supplies (if eligible under your accounting method)

• Completing charitable contributions before December 31

• Reviewing retirement plan contributions (SEP, 401(k), SIMPLE, etc.) for both business owners and employees

• Evaluating inventory for obsolete or unsellable items

  
  

  These opportunities often disappear after the calendar closes, so planning now is critical.

  
  

Evaluate Payroll, Bonuses, and 1099 Requirements

Year-end payroll can have a big impact on taxable income.

• Consider employee bonuses or owner payroll adjustments

• Verify that all W-9 forms have been collected

• Prepare to issue 1099-NEC and 1099-MISC forms in January

• Review contractor vs. employee classifications

Ensuring compliance now prevents last-minute headaches and potential penalties.