Small business year-end tax planning is your last chance to lock in major savings before December 31.
This guide covers the S Corp steps, deductions, AGI strategies, and timing rules that matter now.
Before December 31, your small business year-end tax planning should focus on…
The Three Things Every S Corp Owner Must Do
If you run an S Corp, these steps are not optional. They must be done before year-end.
1. Reasonable Salary
S Corp owners must pay themselves a reasonable salary through payroll.
If you haven’t run payroll yet, this needs to happen before December 31. If you already have, make sure the number is accurate. You may need to bump up your wages or convert part of your owner draws into W-2 compensation.
2. Self-Employed Health Insurance
If you pay for health insurance personally, it must be:
• Reimbursed by the S Corp
• Added to your W-2 in Box 1 and Box 14
• Not included in Social Security or Medicare wages
This amount also counts toward your reasonable salary requirement.
3. Accountable Plan Reimbursements
Your accountable plan is how you get tax-free reimbursements for business expenses paid personally.
This includes home office, mileage, supplies, utilities, and mixed-use costs.
Make any final reimbursements before December 31.
Every S Corp owner should confirm these are done correctly each year.
Maximize Deductions Before Year-End
A few simple checks can unlock deductions most owners forget.
Review Personal Accounts: Meals, travel, tech, and subscriptions often get paid personally. Reimburse any business expenses through your accountable plan.
Hire Your Kids: If your children work in the business, pay them a reasonable wage and shift income into their lower bracket. If you missed it this year, plan for January.
Use the Augusta Rule: You can rent your home to your business for up to 14 days tax-free for board meetings, retreats, or client events. Use a reasonable rate and document everything.
Document Board Meetings: Record your minutes, agenda, and purpose before year-end, especially if tied to the Augusta Rule.
Home Office and Auto: Reimburse home office and mixed-use vehicle expenses correctly.
- S Corps do this through an accountable plan.
- Sole proprietors add them directly on their return.
Retirement and Health Reimbursement Deadlines
These deadlines matter because contributions often depend on calendar year rules.
401(k) Employee Contributions Must Be Made by December 31: This applies whether you’re contributing through payroll or as an owner-employee.
Section 105 Medical Reimbursement Plans and HRAs: If you use a Section 105 plan or an HRA, reimburse all eligible expenses before year-end.
Owners with large medical expenses can save significantly if this is implemented properly.
Your AGI Phaseout Analysis (The Overlooked Tax Strategy)
Your adjusted gross income determines whether you phase out of major tax benefits.
Three areas matter most:
1. QBI Deduction for SSTBs
If you run a Specified Service Trade or Business (SSTB), your QBI deduction phases out at:
• $395,000 (married)
• $197,000 (single)
If you’re near those numbers, strategic deductions can push you back into the full QBI benefit.
2. State and Local Tax (SALT) Cap
The $40,000 SALT cap phases out once income exceeds $500,000.
Dropping below that threshold can restore part of the deduction and save thousands.
3. Long-Term Capital Gains Rates
Your income determines whether your capital gains are taxed at 0%, 15%, or 20%.
Large transactions require planning to avoid jumping into the higher bracket.
This analysis alone can change how you plan the final weeks of the year.
Timing Strategies for Cash-Basis Filers
Timing determines which year income and expenses hit your return.
Delay Billing: If next year will be higher income, push invoices to January.
Prepay Expenses: If this year is higher income, prepay rent or other costs now.
Credit Card Trick: Expenses charged before year-end count this year, even if paid in January.
Roth Conversions: Low-income years are the best time to convert traditional funds to Roth.
Other High-Value Year-End Moves
Place Assets in Service: Equipment and vehicles must be usable before December 31 to deduct them.
Tax-Loss Harvesting: Use losses to offset gains from stock or crypto sales.
Charitable Giving: Donations must be made by December 31 to count this year.
How to Prepare for a Smooth January
Collect W-9s Now: You cannot issue 1099s in January without W-9s from contractors.
Store Receipts Digitally: Write the who, what, where, when, and why on each receipt, then save a photo.
Document Every Strategy: Documentation is what allows strategies like hiring your kids, accountable plan reimbursements, and the Augusta Rule to hold up under audit.
Update Bookkeeping Before the Clock Strikes Midnight: If your books are behind, catch up now. Clean books make tax filing easier and prevent costly mistakes.
TLDR
Here’s what matters most before December 31:
• Run your S Corp salary
• Add self-employed health insurance to your W-2
• Complete accountable plan reimbursements
• Sweep personal accounts for missed deductions
• Use the Augusta Rule correctly
• Run an AGI phaseout analysis
• Time income and expenses strategically
• Place assets in service before year-end
• Prepare W-9s, receipts, documentation, and bookkeeping
Proactive December planning can save thousands.
Reactive planning costs you money.
Transcript
[00:00:00] Introduction: Year-End Tax Strategies
[00:00:00] Mike: So it’s the beginning of December. You’ve got less than 30 days before the clock strikes midnight on 2025. And with that, your last shot of locking in critical tax strategies for your business. But what if you feel behind, maybe even overwhelmed? Listen, that’s more common than you think that today I’m breaking down the essential year-end tax moves that you can still make.
[00:00:20] I’m gonna talk about what to prioritize and why 1231. Isn’t just another deadline. It’s your final opportunity to say big. Alright, let’s go ahead and dive in and get you started fast.
[00:00:49] Essential Moves for S Corp Owners
[00:00:49] Mike: The first thing I wanna talk to you specifically is to those S corp owners out there. So if you’re the owner of an S Corp, there’s a few things that you specifically need to do that maybe if you’re operating as a sole proprietorship or a partnership that you might not need to focus on.
[00:01:02] But as an S Corp owner, there’s three main things. The first one is a reasonable salary. Now, if you’ve been operating as an S corporation, and we talk about it all the time here on our podcast, our YouTube channel, we constantly talk about how you need to have a reasonable salary. As an S-corp owner. So now is the time to make sure that if you haven’t ran a salary, you gotta do that.
[00:01:22] You have to have that salary ran by 12 point 31. But now is also a good time to see is where’s your salary at? Is your salary at a reasonable level, or do you need to run a little bit of a bonus payment? Maybe just move some owner draws into reasonable comp. You can still do that, but now is the time to check to make sure, is that salary reasonable?
[00:01:40] Is your salary number right? Run the numbers. See what that reasonable salary is. And you know, within Taxon we have a worksheet that helps you determine that reasonable salary, but run those numbers. If you haven’t ran a salary yet, do that now. Do not take another minute. Go start to make sure you run that salary.
[00:01:56] If you have been consistently running salary, see if maybe you need to bump it [00:02:00] up a little bit or maybe even you can hold back a little bit. Maybe you’re not gonna take salary the rest of the year if you’re already at that reasonable number. Bottom line is make you get that reasonable salary done. The second thing for S-corp owners is self-employed health insurance.
[00:02:13] So if you are paying for self-employed health insurance out of pocket, you need to treat it a specific way as an S-corp owner. And what you need to do is you need to run those payments through the business. Now, if you’ve been paying for ’em personally, fine, just create a reimbursement through an accountable plan, which we’ll talk about next.
[00:02:28] But make sure the business is taking a business expense for those self-employed health insurance premiums. You then need to add them. To your W2 to box one and box 14, so it’s not gonna be subject to social security tax, Medicare tax, which is box three and five earnings. You’re just adding it to box one earnings.
[00:02:45] But that’s a process that you need to do. You need to contact your payroll provider, whether you’re using Gusto or working with somebody else, whatever it might be. You need to make sure that those self-employed health insurance make it onto that W2. Now you’re gonna get a deduction for it, again, on your personal tax return, but you need to go through [00:03:00] that process to get it added to.
[00:03:01] That W2. So that’s an important step. And now one thing to also consider is that self-employed health insurance premium, that amount that you add to your W2 that counts towards your reasonable salary. So let’s say you determine, you run through the worksheet, you do everything else, and you determine that your reasonable salary is $80,000.
[00:03:17] Well, if you’ve already ran $70,000 in payroll and you have additional 10,000 in self-employed health insurance, you’re dumb. You can stop because you’re gonna add that self-employed health insurance. Through your payroll provider, it’s gonna bump up, bump you up to that 80 number. So make sure that you work with your payroll provider to add that self-employed health insurance and make sure that they’re doing it correctly.
[00:03:36] Make sure you let them know that you are an S Corp owner and it’s only going into box one. It’s gonna be different for anybody else. If you’re paying for health insurance from employees, completely different. But for S Corp owners box. So the first one is, again, is reasonable salary. Make sure you’re running that.
[00:03:50] Two, make sure you contact your payroll provider and add any health insurance premiums if you’re, if you have those. And number three is an accountable plan. Accountable plan is just in a simple way, [00:04:00] a simple word for a more complex word for a reimbursement policy. It’s a way to reimburse yourself for items that you paid for personally.
[00:04:08] That are business related with an accountable plan. Make sure you have it set up. Make sure you have it in place and make sure you make any final reimbursements before 1231. As an S Corp owner, this is how you get that deduction for your home office. This is how you get that deduction for automobile expenses.
[00:04:24] Any items that you, that you have, business and personal mix, you’re gonna use an accountable plan to get the business expense reimbursed yourself as long as you have that accountable plan in place. Tax free income. To you. So make sure you’re making those final reimbursements related to an accountable plan.
[00:04:37] If you don’t have any of this set up, now’s the time to get cooking on that. This is stuff that has to be done by 1231. So as a recap, s corp owners reasonable salary, self-employed health insurance, and make sure that accountable plan set up and reimbursements are made.
[00:04:51] Maximizing Deductions Before Year-End
[00:04:51] Mike: The next thing I wanna talk about is maximizing deductions, and we talk about maximizing deductions in general all the time, and how we can move after tech spending into pre-text spending, making sure we have a business purpose for a lot of the spending.
[00:05:01] But now as we’re getting close to the year end, I don’t wanna dive into that. I just wanna talk about what can we do now or what can we make sure that we’ve buttoned up and done What we can up to this point, the first thing I always recommend is go through your personal statements and see if there’s any business or at least partially business items that slipped through the cracks that you accidentally paid for personally, but we’re actually business related.
[00:05:21] Run through your personal statements and see if there’s anything you can do there. And if there is, great. Add it to your accountable plan. Include that as part of. Your reimbursement. Think of things like meals, travel, technology costs, subscription services, all those. If there’s a business from personal mix, if it’s business related, obviously it’s a full reimbursement.
[00:05:38] If it’s an item, let’s say it’s a Costco membership and you buy business stuff at Costco, you buy personal stuff at Costco, and if it’s about 50 50, well, if you paid for that Costco membership, personally, you should be reimbursing yourself from the business via an accountable plan for 50% of that cost. So go through your personal statements and see if there’s any opportunities there that maybe slipped through the cracks that you haven’t thought about it or you didn’t think about the business [00:06:00] purpose at the time of swiping that card.
[00:06:02] Number two in maximizing induction is hiring your kids. I believe that any business owner with kids, at least roughly age seven, up to about 18, should be hiring their kids in your business. So if you have kids in that range. And you have not hired your kids. Maybe put this on a checklist of something you’re for sure gonna do next year.
[00:06:19] But there is time, there is opportunity to still do that this year. So make sure you’re doing that. If you are hiring your kids, pick this opportunity. Just button things up a little bit. Make sure that you’re doing things correctly. Make sure you have the documentation to support the hiring of that kids, in your business.
[00:06:33] The third item I wanna talk about is the Augusta rule, or the 14 day home rental rule. Make sure that if you’re utilizing this rule, and this is a way to rent your home to your business for business related events, this is separate from the home office. This is in addition to the home office, but maybe you’re having board meetings at your home, or maybe you’re having team retreats or client staying over, or team member staying over, whatever it might be.
[00:06:55] If you rent your home for 14 days or less, you do not pay taxes. On [00:07:00] that income. And so if your business was using your home outside of your home office for various different events or people staying over that are business related, make sure you set up that Augusta rule. Make sure you have all the documentation to support it and in place and a reasonable rate of reasonable comp.
[00:07:14] You find out what a reasonable rental rate is and then make sure you make that payment from the business to your personal account for that piece. Make sure that’s done before 1231. The next item I wanna talk about is a boardroom, making sure that you’re completing your board meetings. So, as part of the Augusta Rule, a lot of times people use board meetings to help make up for that Augusta rule to help give events at your home for that.
[00:07:36] But either way, making sure that you have a board meeting on the books and any expense and costs associated with that board meeting, making sure that those were taken, on your business bookkeeping file as well. And then of course, home office and automobile.
[00:07:48] So, home office and automobile, that’s gonna be part of the accountable plan. Unless it’s an automobile, it’s a hundred percent business. Obviously we’re running that through the business. But if it’s got business personal mix, oftentimes we’re gonna see that on the personal side. Make sure you’re [00:08:00] making that reimbursement through the accountable plan.
[00:08:01] If your set is a sole proprietorship or a partnership or something that’s not an S corporation, make sure you get all these documents calculated so you can return, so you can create that expense on your business tax return.
[00:08:14] Retirement and Health Contributions
[00:08:14] Mike: Now the next thing I wanna talk about when we talk about year end is just a few things up against retirement and health.
[00:08:19] So first off, retirement, if you’re funding a 401k. If you’re funding, and this is for business related or for your employer, just make sure you complete your employee contributions before year end. Traditionally, and there’s some workarounds, there’s some, caveats to this rule, but generally stating employee contributions need to be made by 1231.
[00:08:37] So just make sure that you’re doing that, uh, making those contribution amounts if if necessary. The second thing on the health side is that if you set up a section 1 0 5 plan, this is for a medical expense reimbursement plan. If you have a lot of medical expenses, and you’re using a strategy to help, get a deduction for those via the section 1 0 5 plan.
[00:08:56] Or if you have an HRA plan, a health reimbursement arrangement for [00:09:00] your employees, things like that. Make sure that you’re completing any reimbursements before year end. So just a couple key notes we wanna think about. If this is something you’re like, Hey, that could qualify for that, check out previous episodes, check out previous videos that we did, and put this on your list to say, Hey, I’m gonna do this next year, because there might not be enough time to do it this year.
[00:09:17] There might be, depending on where you’re at. So just start to look into that now real quick. If you are a business owner and you’re tired of guessing when it comes to taxes, we just released a brand new tax saving starter kit. And it’s a hundred percent free inside, you’re gonna get our ultimate list of business deductions.
[00:09:34] You’re gonna get a real case study showing how we saved others 5,000 or $25,000 or more. And you’re also gonna get access to a bonus discovery call with our team. Just head on over to tax savings podcast.com/starter kit to grab your free copy. Again, that’s tax savings podcast.com/starter kit. Alright, back to year end items.
[00:09:57] Adjusted Gross Income (AGI) Analysis
[00:09:57] Mike: The next topic that I wanna talk about, and I think this is [00:10:00] super important, sometimes something that the business owners overlook or don’t even think about, but I’m calling it a GI Analysis or income analysis. A GI stands for adjusted gross Income. So doing an analysis for that and specifically this comes around phase out, so we want to see if you’re close.
[00:10:17] Two phase outs for certain things. We wanna look at planning opportunities to bring us below that potential phase out window. We might look at oil and gas investments. We wanna look at asset purchases, whatever it is. We just wanna make sure that if we’re close to that phase out range, is there something that we can do here before year end to bring us under that phase.
[00:10:36] To not only get a benefit from whatever that tax deduction is there, but also we’re getting the full amount of whatever that phase out might be. And so there’s a couple different things that this qualifies for. First one I wanna talk about is the QBI DE deduction, the qualified business income deduction, and specifically for those that have specified service, trade, or business.
[00:10:55] So oftentimes it’s called an ss. Tb, if you have an [00:11:00] SSTB. The QBI deduction starts to phase out once you have income of, roughly $395,000 if you’re married, or $197,000 if you’re single. So if you’re starting to creep towards those amounts, we might say, let’s say you’re at fi 450,000 and it phases starts to phase out at 395.
[00:11:18] Well, if we could get a deduction that brings us below that phase out window, not only are we now gonna get more QBI deduction, but we’re also gonna get a benefit from whatever that deduction. So it might be involved in, Hey, I’m gonna invest $50,000 in oil and gas, or I’m gonna invest, do something with an asset purchase, something like that.
[00:11:35] Again, we wanna make sure that if we’re spending money. It makes sense and it’s something that’s good for our business. Again, I don’t want anyone to walk away from anything that we talk about to say, oh, I’m gonna go buy something that I don’t really need, but I’m just gonna go buy it for tax deduction.
[00:11:47] That’s never something that we talk about. I wanna make that very clear. But there is opportunities that we could start to lower that income to get us below a phase out range. So. Main one that we talked about that with a lot [00:12:00] is the QBI deduction for SSBs, again, starts to phase out when you have income of 395,000 if you’re married, or 197,000 if you’re single.
[00:12:08] That’s when you wants start to look at that. The second piece is the salt cap, and so this is state and local income taxes. Part of itemized deductions, especially if you’re in a high income state, um, or a state with high property taxes. This could come into play. Now that cap is set at $40,000, but that $40,000.
[00:12:26] Starts to phase out once you have an income of $500,000. So as we’re getting up there, if you have income of $600,000, that cap, that 40,000 cap, you don’t get access to. So we wanna make sure that that’s a big chunk, chunk of change that we could, if we can bring, make an investment, do something to help bring us under that cap.
[00:12:45] It’s gonna phase us into that salt cap and can be a double whammy of where you get a tax impact from the tax savings of whatever activity you were part of. But you also brought back more of that salt cap, which it gives you even more. Tax savings, so some really cool planning [00:13:00] opportunities there. Again, sometimes we’re investing in oil and gas.
[00:13:02] Sometimes we’re looking at various different asset purchases to accomplish this, but we wanna be aware where’s our A GR at, and are we close to any of these phase out ranges or these caps? The final one I wanna talk about kind of in this bucket is long-term capital gains. So if you’re married and you have total income of 96,000 to 600,000, your long-term capital gain rate is 15,000, is 15%.
[00:13:26] If your income is over 600,000, your long-term capital gain rate is 20%. So if you have total income. That’s starting to hit one of those benchmarks, we might wanna look at, hey, how do we get our income below that amount so that we can get a lower long-term capital gain rate? If you’re single, that total income, if you have income of 48 to 533,000, 15% long-term capital gain over 533,000, 20% long-term capital gain.
[00:13:53] So again, there’s some planning opportunities there where maybe if we’re starting to inch into that 20% capital gain. [00:14:00] How do we get back into the 15? Or if we’re in that 15 and we have the opportunity to get down into the zero, how do we do that? What, what things can we do to help us move into some of those different areas?
[00:14:09] Again, just some a GI type planning that we recommend.
[00:14:13]
[00:14:14] Mike: The next thing I wanna talk about today is timing.
[00:14:17] Timing Strategies for Cash Basis Filers
[00:14:17] Mike: You know, specifically timing for cash base filers. And when I talk about timing, this oftentimes talks about, you know, moving expenses up or delaying income or various different things. And so I always say before we talk about these strateg.
[00:14:33] Let’s do an analysis. What is this year’s income gonna look like versus next year’s income? If every year is kind of just the same, you’re pretty steady, pretty consistent, fine, we can do planning around that. But let’s say this year, you’re gonna have a really big year this year, and you expect that to go down next year, or maybe this year is a down year and you expect next year.
[00:14:52] To go up. We wanna do some planning around that. You know, would I want to, prepay expenses and get more expenses on the books in a [00:15:00] year that I’m gonna have a lower income if I could use those next year when I’m in a higher tax bracket, when those expenses are gonna gimme even more tax breaks because I have more income next year.
[00:15:10] Do some of that planning and let’s plan around that. When we talk about timing. There’s a couple different strategies we look at. It might be prepay expenses. Maybe you’re thinking about, okay, I got rent next year. This is a big income year. I’m gonna prepay my rent for next year, get a deduction this year.
[00:15:25] Yeah, IS has a safe harbor for that. If you have a low income this year, we probably say, let’s not do this at all. Let’s actually hold off on expenses if we can, and let’s get ’em into next year. When we’re expecting to have a higher income this year, instead of taking a deduction, a low income year when I’m in a lower tax bracket.
[00:15:42] So just some planning around there. The second strategy we talk about timing is delaying your billing. So, you know, let’s say that you’re in a high income year and next year’s gonna be a low income year. Maybe we’re gonna say, Hey, instead of sending those invoices out at middle of December, late December, maybe, we’re just gonna hold off.
[00:15:58] We’re gonna send those invoices out [00:16:00] January 1st and get paid. So that income’s going on next year. Again, this is for cash basis filers, but there’s some plan there. But again, be strategic. Analyze what is this year’s income gonna be like compared to next year’s, and see when it makes sense to do some of that.
[00:16:13] These are just some end year opportunities. The other thing I wanna talk about is credit cards. If you put an expense on your credit card now, I would never recommend somebody to. Spend something on a credit card unless you have the cash to pay it back. But just some, just one thing to note that if you put something on a credit card, you get the deduction in the year that it was charged.
[00:16:32] So if you put something, if you buy a 5,000 computer on, the middle of December but on, and you use your credit card, you get a deduction for that computer as long as it’s placed in service this year, even though you’re not gonna pay that credit card until next year.
[00:16:46] Totally fine. The other thing I wanna talk about from when it comes from a timing perspective is a Roth conversion. You know, converting retirement accounts that are traditional monies into Roth can be super powerful. Now the problem is when you go from traditional [00:17:00] retirement accounts into Roth and you convert them into Roth, you have to pay taxes on that.
[00:17:04] But you’re not getting the cash. It’s just going from one one retirement account to the other retirement account. But you gotta pay cash. In that year that you convert? Well, oftentimes I’m talking to business owners and we’re saying, Hey, we have big deductions this year for whatever reason. That might be, or we’re in a super low income tax bracket when we’re typically higher, now is a great opportunity to say, Hey, let’s maybe look at a Roth conversion, especially in those low income years.
[00:17:27] Can we convert some of those traditional monies into Roth and create a better benefit for us when it comes to retirement time? So think about those Roth conversions as an opportunity.
[00:17:39] Miscellaneous Year-End Tips
[00:17:39] Mike: Now, a couple miscellaneous items. First off, if you have an asset that you purchased, make sure you put it in service.
[00:17:45] This is huge. In order for to get that deduction in year one, that asset needs to be put into service. So you buy a vehicle, make sure you’re driving it at least one mile before the end of the year. If you bought a vehicle on December 27th and that vehicle was not delivered, you did not have [00:18:00] access to it until January 2nd.
[00:18:01] Guess what? That vehicle goes to January. That’s not a deduction that you get this year. Same thing with rental properties. Maybe you’re using the short term rental loophole or long term rental or whatever it might be. Make sure you’re putting them in service. Make sure you have a few rentals of those properties to show that property was put into service this year.
[00:18:19] The other thing I wanna talk about is tax lost harvesting, and this is if you’re facing a capital gain, maybe you sold a bunch of stock, maybe you have a gain coming from a stock. We wanna look at, and this comes in crypto too. Do you have a loss in another type of stock or another type of asset that you could sell that.
[00:18:35] To use that loss to offset your gain. They call this tax loss harvesting. We sell something at a gain. We have something at a loss. Can we use that loss to offset that gain and then get into a similar type investment down the road? That’s, there’s a lot of planning around that. Talk to your financial advisors.
[00:18:49] See if this would play into anything that you have there. So this would be for stock sales. Crypto sales. See if there’s, if you’re facing a large capital gain from a sale like that, a stock or crypto, see if there’s a loss, a position when you’re at a [00:19:00] loss in that you could sell. Take that loss, offset that gain, and then reinvest cash into that, a similar type asset.
[00:19:07] Or wait past the wash sale rules and invest into it again. And then finally, in this category, I wanna talk about charitable contributions. If you’re making contributions to a charity that you want to qualify as an itemized deduction, charitable deduction, you need to make sure those contributions are made by 1231.
[00:19:23] If you take that cash out, and you’re gonna make a contribution to a charity, and you do it on January 2nd, guess what? It’s a next year charitable deduction, not this year. So make sure you’re making charitable deductions by the end of the year.
[00:19:35] Preparing for the New Year
[00:19:35] Mike: Now a couple things to prepare for year end, because year ends.
[00:19:39] Very close. And so a lot of the times when we’re planning like this, there’s not that much opportunities away, but I wanna make sure that you’re prepared. So a couple of things that you can start doing now to prepare for the new year to make sure you start the New Year off right, to make your January as easy as possible.
[00:19:54] Number one, collect data for 10 90 nines. 10 90 nines. Or when you pay contractors, when you have [00:20:00] contractors that you make payments to, you need to send them a 10 99. By the end of January. Now, in order to send them that 10 99, you’re gonna need a W nine that’s gonna give you their business name, their address, their social security number, or their EIN.
[00:20:12] So make sure you’re collecting W nines now so that when January turns around, you can start to prepare and send out those 10 90 nines. So that’s number one. Collect data for 10 90 nines. Number two is make sure you save receipts. Anything that we do, whenever we’re talking about tax strategy, we wanna make sure we have receipts on file that can help back that up.
[00:20:29] Now, don’t have a shoebox of receipts in your office. Take a picture of it, write on the receipt who, what, where, when, why everything about it, why it’s business related rather than receipt. Take a picture of it stored digitally. You may never need that receipt, but if you do, you have it available to you.
[00:20:43] So make sure that you’re just kind of putting your collecting, getting those receipts on, on, on file for you. The third one is strategy. Documentation. And when I talk about tax strategies, I always talk about how implementation and documentation is so key. [00:21:00] Documentation is what helps you sleep at night.
[00:21:01] Documentation is what helps solidifies what you’re doing. Documentation. Is what’s gonna make an audit easy. If the are, if the artist comes knocking, you’re gonna fill, give ’em this documentation for all these strategies, all these things that you did, they’re gonna look at and say, okay, you’re good to go.
[00:21:16] Moving on to the next audit. That’s what we want. So make sure that when we’re implementing these tax strategies that we’re doing correct implementation and having that documentation on file. You know, I see every single day talking to business owners where they’re implementing this strategy or they’re doing this.
[00:21:32] But they have no documentation. They have nothing to support it. And I always tell them, I said, you gotta get these things in place. If the owners came knocking and they said, Hey, I see that you paid, you know, $15,000 for the 14 day home run to rule, or I see that you paid this child $15,000, and you say, yeah, I did.
[00:21:48] You know, they did work for me, they did this. They say, okay, send me some of that documentation. And you have nothing. You have nothing that shows why it’s a reasonable rate. What work they did nothing to support. That’s strategy. Guess [00:22:00] what IRS says? Nope, strategy not allowed. So make sure as part of tax strategy is correct, implementation, making sure that we’re doing these things right with the documentation on file to help defend it if we ever need it.
[00:22:13] Final piece for your end is bookkeeping. Get your bookkeeping up to date. This can be a thorn in the side of a business owner and can go on for months and months and months after 1231. If you haven’t done any bookkeeping, do it now. Get it done before 1231. If you do it now, guess what? You got a couple weeks to finish up that happened between when, when you got it done and the end of the year, and you’re gonna be ready and prepared for tax season.
[00:22:37] Now is a great time to get caught up on bookkeeping, making sure things are accurate. Do a review of it. Do things look right. Is everything in the right place? Are things looking good? Make bookkeeping a priority and start it. Now. It should have started at the beginning of the year, but start it now. If you want to have a nice, clean, easy tax season.
[00:22:54] Conclusion: Taking Action and Planning Ahead
[00:22:54] Mike: Finally, I want to end today with this concept of overwhelm. Today. [00:23:00] We talked about a ton of different strategies. We talked about a ton of different things that you need to do, but this shouldn’t be the first time that you’re hearing about it or the first time that you’re looking to implement it, because guess what?
[00:23:12] If you haven’t done anything on the checklist that we went through today. You’re gonna be in for her. You cannot complete all this before 1231. So if you’re feeling overwhelmed and being like, man, I have, I’m gonna have so much taxes to pay, I don’t have enough time to do this. You know what do I do?
[00:23:26] Pick a few strategies and implement them correctly, and use this as a lesson to say, next year I’m gonna take tax planning seriously. Next year I’m gonna make this, the year I pay the least amount in taxes legally possible. So I know. As a business owner, we get caught into different things and now it’s the end of the year and now it’s like I gotta rush.
[00:23:45] I could get all these different tax strategies implemented and I know that can feel overwhelming. Don’t try to do it all. Use this as a lesson. Get what you can done. Pick two or three of the highest hitting the best results you’re gonna get. Pick two or three of the strategies, get those done. [00:24:00] Before 1231.
[00:24:01] And then use this as a lesson, make it a priority that as we start 2026, this is, the 2026 is gonna be, you pay the least amount of taxes. So try to get that done. Try to create that mindset to make a change. If you’re in that situation now, if you’re on top of it, you’re marking off as we’re going through today, you’re done, done, done, great.
[00:24:19] Continue to do what you’re doing and continue to dive further. And again, make sure that implementation piece is correct. ’cause I talk to a lot of business owners. They’re implementing these strategies and doing things, but they don’t have documentation to it, or they’re not utilizing the strategy to its full extent.
[00:24:35] So if you’re in that person that’s checked everything off. Don’t just think you’re done, review it. Make sure you, first off, you have the documentation on file, but second piece, make sure you’ve done the strategy to its fullest extent. That’s gonna give you the most amount in tax savings. But here’s the bottom line.
[00:24:50] December 31st is a finish line, not just for the year, but for real tangible money saving tax moves if you are able to take action now, even just one or [00:25:00] two of these strategies. Could save you thousands of dollars. But if you are feeling that this year’s already slipped through your fingers, don’t beat yourself up.
[00:25:07] Use this moment as a launchpad, a learning opportunity. So when 2026 rolls around, you’re not reacting. You are leading. You are leading the fight to tax savings. And if you found this helpful, don’t forget to subscribe. Hit that like button and share it with a business owner who’s sick. Of paying too much in tax.
[00:25:24] And if you want help from our team of tax professionals implementing all the strategy we talked about today and so many more, visit tax elm.com. That’s T-A-X-E-L m.com, or click the link into the description for our free discovery call. We are helping people like you legally lower your tax bill every single day.
[00:25:42] Thanks for watching, and I’ll see you on the next one.
[00:25:45] Mike: Thanks for tuning in to the Small Business Tax Savings Podcast. We hope today’s episode sparked some brilliant ideas to help you save on taxes and grow your wealth. If you loved what you heard, hit the subscribe [00:26:00] button and share the wealth with fellow entrepreneurs. For a treasure trove of tax saving resources, visit tax Savings podcast.com.
[00:26:09] There you’ll find tools, guides, and all the info you need on reducing your taxes. Let’s elevate your business to new heights together. Remember the insight shared here for educational purposes and not specific tax or legal advice. Always consult with a qualified professional for your unique situation.
[00:26:27] Until next time, keep thriving and saving.