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Peacock & French CPAs
Nov 02, 2026

For small business owners, the end of the year can arrive quickly. Between serving customers, managing employees, paying bills and keeping up with day-to-day operations, tax planning may not be at the top of the list. However, taking time to review your financial picture before December 31 can put you in a much better position when tax season arrives.

Tax preparation and tax planning are two different things. Tax preparation generally looks backward at income, expenses and transactions that have already occurred. Tax planning looks at where you stand now and what opportunities or issues may still be addressed before the year closes.

While every business has a different financial and tax situation, there are several areas worth reviewing with your CPA before year-end.

START WITH YOUR YEAR-TO-DATE FINANCIALS

Effective tax planning starts with knowing where your business actually stands.

Review your year-to-date profit and loss statement, balance sheet and other important financial reports. Compare revenue and expenses with the prior year and with what you expected at the beginning of this year.

Was revenue significantly higher than anticipated? Did expenses increase? Did you add employees, purchase equipment, lose a major customer or experience another significant change?

Your bookkeeping should also be current. Bank and credit card accounts should be reconciled, major transactions should be properly recorded, and unusual items should be identified.

This information helps your CPA develop a more accurate picture of your expected taxable income. Without current financial information, year-end tax planning can become more guesswork than planning.

REVISIT YOUR ESTIMATED TAX PAYMENTS

The estimated tax payments you planned earlier in the year may no longer reflect what actually happened.

A strong year could mean your income and potential tax liability are higher than originally projected. A slower year could produce the opposite result. Changes in income outside the business can also affect your overall tax picture.

Before making another estimated payment, consider reviewing your year-to-date results with your CPA and reviewing your quarterly estimated tax payments to make sure they still align with your current situation. An updated projection can help determine whether your current payments remain appropriate.

Knowing approximately where you stand can also help with cash-flow planning. It is generally better to anticipate a potential tax obligation than to discover it for the first time when your return is being prepared.

CONSIDER THE TIMING OF BUSINESS PURCHASES AND EXPENSES

If you're already considering a major business purchase, its timing may be worth discussing before December 31.

Computers, machinery, office equipment, furniture, software and certain other business assets may qualify for deductions or depreciation treatment. Depending on the circumstances, provisions such as the Section 179 deduction may also be relevant.

The important point is not to spend money simply because something might be deductible. Spending $10,000 unnecessarily doesn't make sense just to receive a tax benefit.

However, if your business genuinely needs equipment or another major purchase in the near future, your CPA can help you understand whether completing the purchase this year or waiting until next year could have different tax consequences.

REVIEW RETIREMENT PLANNING OPPORTUNITIES

Retirement planning can be an important part of the year-end conversation, particularly for business owners.

Depending on the business, options may include a SEP IRA, SIMPLE IRA, 401(k) or another type of retirement plan. Each comes with its own eligibility requirements, contribution rules and deadlines.

If you already have a retirement plan, review your contributions and determine whether there are additional opportunities available before applicable deadlines. If you don't currently offer or participate in a retirement plan through your business, this may be a good time to discuss whether establishing one makes sense.

Because retirement plan rules can vary considerably, this is an area where planning with your CPA and financial advisor can be especially valuable.

TAKE ANOTHER LOOK AT YOUR BUSINESS STRUCTURE

As businesses grow and change, the structure that made sense several years ago may deserve another look.

A sole proprietorship, partnership, LLC and corporation can each have different tax and administrative considerations. For some business owners, an S corporation election may be worth evaluating, while for others it may offer little benefit or add unnecessary complexity.

This doesn't mean a business should change its structure every year. Instead, year-end provides a natural opportunity to ask whether your current structure continues to fit the size, profitability and direction of your business.

If a change is appropriate, planning ahead can be much easier than trying to address the issue after another tax year has passed.

GET YOUR RECORDS READY FOR YEAR-END

Good records make both tax planning and tax preparation easier.

Review outstanding accounts receivable and accounts payable. Make sure personal and business transactions are properly separated. Check your vendor and independent contractor records so you have the information needed for any required Forms 1099.

You should also review transactions that haven't been categorized or that you're unsure how to treat. Rather than allowing questions to accumulate until tax season, addressing them now can provide a cleaner and more accurate year-end financial picture.

This is particularly important if your bookkeeping has fallen behind during a busy period. Getting caught up before the end of the year gives both you and your CPA better information to work with.

THINK ABOUT WHAT IS COMING NEXT YEAR

Year-end tax planning shouldn't focus exclusively on December 31.

Think about what you expect from your business during the coming year. Are you planning to hire employees, purchase equipment, open another location, expand operations or make a significant investment?

Perhaps you're considering bringing in a partner, selling part of the business, transitioning ownership to a family member or beginning to plan for retirement.

These decisions can have financial and tax implications. Discussing them early allows your CPA to understand your goals and identify issues that may need to be considered before decisions are finalized.

TALK WITH YOUR CPA BEFORE THE YEAR IS OVER

One of the biggest advantages of year-end tax planning is simply having the conversation while there is still time to act.

Once the calendar turns to a new year, some opportunities related to the previous tax year may no longer be available. Waiting until your tax return is being prepared can mean learning about an opportunity after the deadline for taking advantage of it has already passed.

Every business is different. Your income, expenses, business structure, retirement plans and future goals all play a role in determining which year-end strategies may be appropriate.

Peacock & French, CPAs, P.A. works with businesses in Venice and throughout Southwest Florida on tax planning, accounting and business consulting. If you haven't reviewed your business's tax position for the year, now is a good time to start the conversation. Contact Peacock & French to schedule a year-end tax planning consultation and discuss the issues and opportunities that may apply to your business.

A little planning before December 31 can help you understand where your business stands, prepare for the upcoming tax season and begin the new year with a clearer financial picture.