7 Key Year-End Tax Questions Every Business Should Review

As the end of the year approaches, it’s a great time to take a closer look at your tax situation. A little planning before December 31 can help reduce your tax burden, strengthen your cash flow, and set your business up for a successful start to the new year. Whether you run a one-person operation or manage a growing team, the following seven questions can help guide your year-end review and uncover opportunities you may have overlooked.

1. Have I gathered and recorded all business expenses?

Even the smallest expenses can make a noticeable difference when it comes to deductions—if they’re documented properly. It’s common to misplace receipts or forget smaller purchases, especially when personal accounts occasionally cover business needs.

Before the year officially ends, take time to collect receipts, match charges on your credit card statements, and confirm that all expenses have been categorized. Don’t forget recurring charges like software tools, training programs, business meals, professional dues, and mileage. If you work from home, a portion of household expenses such as utilities or rent might also qualify. A thorough review now helps ensure you’re not missing out on legitimate deductions.

2. Is now the right time to invest in major purchases?

If you’ve been thinking about buying equipment, upgrading technology, or adding a company vehicle, your timing could affect your tax outcome. Current rules for Section 179 and bonus depreciation may allow you to deduct part or even all of the cost this year instead of spreading it across future tax periods.

Making these purchases before December 31 might accelerate deductions into the current tax year. Still, it’s smart to weigh the long-term value. Avoid buying something solely for the write-off—make sure it supports your operations and business goals.

3. Am I maximizing retirement plan contributions?

Retirement plans aren’t just beneficial for employees—they’re powerful tools for business owners looking to lower taxable income while building long-term financial security. Options such as SEP IRAs, SIMPLE IRAs, and 401(k) plans can offer meaningful tax advantages.

If it’s been a while since you reviewed your plan, now is a great time to revisit it. Increasing contributions before the end of the year can help reduce your current tax liability while supporting future savings. Even small businesses and sole proprietors can see substantial benefits from optimizing their retirement contributions.

4. Do I need to review payroll or my own compensation?

Year-end is also a smart moment to assess how you’re compensating yourself and any employees. For S-Corporation owners, this means ensuring your salary qualifies as “reasonable” under IRS guidelines. Paying yourself too much or too little can create issues down the line. Sole proprietors and partners should review their withdrawals and ensure estimated tax payments are in good shape.

Taking a closer look now can help keep cash flow steady and reduce surprises at tax time. It’s also a chance to verify that withholdings, benefits, and bonuses are being tracked correctly before W-2s and 1099s are finalized in January.

5. Are there tax credits I might qualify for?

Tax credits often don’t get the attention they deserve, but they can be incredibly valuable since they reduce your tax bill dollar-for-dollar. Depending on your business type and activities, you may be eligible for credits such as the Research and Development credit, energy-efficiency incentives, or the small business health care tax credit.

These programs change frequently, so it’s worth checking with your accountant to confirm whether you qualify. Even a smaller credit can make a noticeable impact when applied directly against your tax liability.

6. Do I need to update my estimated tax payments?

Most business owners want to avoid unexpected tax bills. If your revenue this year was significantly higher—or lower—than anticipated, it may be wise to adjust your estimated payments before the year ends.

Compare your financial performance to the projections you used when setting your quarterly payments. If business growth accelerated or you added new income sources, a higher final estimated payment may be appropriate. If revenue slowed, lowering your payment might help improve cash flow. Taking action now helps ensure a smoother start to the upcoming tax season.

7. How does my tax outlook appear for next year?

While the focus of year-end planning is wrapping up this year’s obligations, it’s also an ideal moment to think ahead. Decisions you make today can influence your financial position in the year ahead. Consider how planned hires, expansion ideas, or major purchases may affect your taxes in 2026.

A forward-thinking discussion with your tax advisor can help you develop strategies that balance immediate savings with long-term goals. Depending on your expectations for next year, it may make sense to delay income, speed up deductions, or adjust financial plans to put your business in the best possible position.

Final Thoughts: Prepare Now for a Stronger Tomorrow

Successful business owners don’t wait until tax season to begin thinking about their financial picture. A careful year-end review can reveal overlooked deductions, available credits, and opportunities to plan more intentionally. Small steps taken before December 31 can lead to meaningful savings and greater confidence heading into the new year.

If you want to fine-tune your year-end tax strategy or strengthen your financial planning, now is an ideal time to act. Reach out to your advisor or contact our team to schedule a consultation before the year concludes. A bit of preparation today can help your business thrive in the months ahead.