7 Key Tax Questions to Review Before the Year Ends

As the close of the year approaches, it’s an ideal moment for businesses to take a thoughtful look at their tax situation. A little planning before December 31 can help reduce your tax burden, improve cash flow, and position your business for a stronger financial start in the new year. Whether you run a small operation or lead a growing team, the seven questions below can guide your year-end review and highlight areas where you may uncover meaningful savings.

1. Have I recorded all of my business expenses?

Even small purchases can make a noticeable difference at tax time, but only if they’re properly documented. Throughout the year, it’s surprisingly easy to lose track of receipts or forget about minor transactions—especially when business and personal accounts occasionally overlap.

Before the year concludes, take time to gather all outstanding receipts, review your credit card activity, and verify that no expenses have been overlooked. Pay close attention to recurring costs like digital tools, meals for business purposes, courses or certifications, memberships, and mileage logs. If you maintain a home office, remember that a portion of your rent or utilities might also be deductible. Doing a detailed sweep now helps ensure you claim every valid expense when filing.

2. Is it smart to make larger purchases before December 31?

If you’ve been considering buying equipment, upgrading technology, or investing in a company vehicle, the timing could influence your tax outcome. Through Section 179 and bonus depreciation rules, certain qualifying purchases may be eligible for full or partial deductions in the current year rather than over several years.

Making these purchases before year-end could pull those deductions into this year’s return. That said, decisions should be meaningful and aligned with your business needs. Avoid buying something solely to secure a deduction. Instead, evaluate how the purchase supports your operations and long-term objectives before moving forward.

3. Am I making the most of retirement contribution options?

Retirement plans are more than employee perks—they’re powerful tools for business owners looking to reduce taxable income while building long-term financial security. Options like SEP IRAs, SIMPLE IRAs, and 401(k)s allow contributions that can significantly lower your tax liability for the year.

If you haven’t reviewed your retirement plan strategy recently, now is an excellent time. Increasing contributions before December 31 can help you take advantage of available deductions while strengthening your personal and team retirement goals. Even solo business owners stand to benefit from optimizing these contributions.

4. Do my payroll and owner compensation need review?

The end of the year offers a good opportunity to revisit payroll processes and compensation levels. For S-Corporations, it’s especially important to confirm that your salary meets the IRS “reasonable compensation” guidelines—too high or too low can create tax complications. For sole proprietors or partners, assess how much you’ve withdrawn and whether your estimated taxes are accurate.

Making adjustments now can help smooth out cash flow and reduce potential issues during tax season. This is also a useful time to verify that withholdings, benefits, and bonuses are properly recorded before issuing W-2s and 1099s at the start of the year.

5. Are there tax credits I may qualify for?

Tax credits often go unnoticed, yet they can be more impactful than deductions because they directly lower your tax bill. Depending on your business activities, you may be eligible for credits such as the Research and Development (R&D) credit, certain energy-efficiency incentives, or the small business health care tax credit.

Because programs change over time, it’s wise to ask your accountant to review whether you qualify for any available credits. Even a relatively small credit can make a meaningful difference when it directly offsets your year-end tax liability.

6. Should I update my estimated tax payments?

No business owner likes unexpected tax bills. If your revenue this year ended up higher—or lower—than projected, adjusting your estimated payments can help you avoid penalties and manage cash flow more effectively.

Review your year-to-date financials and compare them with your estimates from earlier in the year. A stronger-than-expected quarter or new income stream may justify increasing your final estimated payment. Alternatively, if business slowed down, adjusting your payments downward could help preserve cash. Taking a proactive approach keeps your financial outlook steady and predictable.

7. What does my tax outlook look like heading into next year?

Although year-end reviews focus on the current tax year, it’s also a great time to think ahead. Choices you make now can influence your tax position in the year to come. Think about planned growth, anticipated hiring, or potential equipment needs and how these may affect your 2026 taxes.

A forward-looking discussion with your accountant can help you plan strategically. Depending on your expected income next year, it might make sense to defer revenue or accelerate deductions. Taking the long view now sets your business up for better decision-making in the months ahead.

Final Thoughts: Planning Ahead Pays Off

The businesses that benefit most at tax time are the ones that begin preparing before January arrives. A thoughtful end-of-year evaluation can uncover overlooked deductions, surface credit opportunities, and help you make informed decisions that keep more money working within your company.

If you’re looking to review your tax strategy or strengthen your financial plan, now is the ideal time to act. Reach out to a trusted advisor or schedule a consultation before December 31. A bit of preparation today can translate into meaningful savings tomorrow—and help your business step confidently into the new year.