As a business owner, the end of the year is the perfect time to tidy up your finances, save on taxes, and get your business ready for next year. Whether you run an LLC, Partnership, or S corporation, there are simple steps you can take now to save money and avoid stress when tax season rolls around.

Let’s dive into some easy-to-understand tips to help you wrap up the year the right way!

Why Year-End Tax Planning Matters for Business Owners

The end of the year is your last chance to lower your taxes and get organized before next year. Acting now can help you:

Pay less in taxes.
Stay on top of important deadlines.
Set your business up for success in the new year.

Ask yourself: Have I done everything I can to save money on taxes this year?

Your Year-End Tax Checklist Made Simple

1. File the FinCEN Beneficial Ownership Report and State Reports

Big Reminder: If your business is required to file the FinCEN Beneficial Ownership Report, make sure it’s submitted before the end of the year. Missing this 12/31 deadline could lead to penalties of more than $500 per day!
State Reports: Most states require an annual report or bi-annual report depending on your entity type to keep your business in good standing. File your report with your state or set a reminder to file it in the upcoming month when it is due.
Need Help with the FinCEN BOI filing? Check out my blog and YouTube videos for all the details on who needs to file and how to stay compliant. Note that Sole Proprietorships do not need to file the FinCEN report, only state registered entities.

2. Tidy Up Payroll and Employee Paychecks

Make sure any bonuses, raises, or extra paychecks are sent out before your last payroll of the year.
If you’re behind on paychecks, run a “catch-up” payroll so owners and employees can contribute more to 401(k) retirement accounts.
Pay yourself and any family members through payroll if needed. (NOTE: LLCs and Sole Prop do NOT pay owners via payroll, but S Corporations do pay owners via payroll)
Plan something special for your employees, like a holiday party or small gift, to show you appreciate them. Employee appreciation events and holiday parties are 100% deductible.

3. Buy Business Supplies or Equipment

If you need equipment, like computers, tools, or software, buy it before December 31 so you can write it off on your 2024 taxes.
Need a business vehicle? Check out my blog and YouTube video for tips.
Starting a new business in 2024? Make at least one sale and generate some income before year-end so we can write off your expenses in this tax year.

4. Thank Your Customers, Clients and top Referrers

Show your clients and valued network that you value them by giving a small gift, like a gift card or a thoughtful item. Gifts can be deducted as long as they are <$25 for individuals and <$75 for businesses.

5. Make Pass-Through Entity (PTE) Tax Payments

If your business elected the state PTE election, be sure to send your payments before year-end to get the deduction in the 2024 tax year.

6. Don’t Forget Personal Tax Estimates

Why it’s important: If your business has profits or income with no tax withheld, like pass-through income, you may need to pay personal estimated taxes to the IRS and your state. Missing these payments can lead to penalties and leave you with a surprise tax bill.
Tip: Not sure how much to pay? Here’s a quick way to figure it out:
1. Estimate your net income for the year.
2. Look up your “effective tax rate” from your 2023 tax return.
3. Multiply that tax rate by your expected profits for 2024.
4. Make that payment to the IRS.
5. Repeat for your state taxes, using your effective state tax rate from 2023 if your state has income taxes.

This quick calculation helps you avoid underpayment penalties and interest and keeps your taxes on track!

7. Review Insurance Policies

Update your life insurance policies, workers comp and liability coverage. Confirm that it reflects current revenue, operations and employees.

8. Wrap Up Your Business Finances

Go through your books and get them up to date. Reconcile bank and credit cards to identify errors and mitigate double counting of income.
Collect W-9 forms from contractors and vendors to prep to send out 1099 forms in January.
If you’re thinking about changing your business type, like switching to an S corporation, talk to a tax pro to see if it makes sense.
If you are a multi-owner business, review your distributions for the year and confirm they follow ownership / profit sharing percentage or make adjustments to correct.

9. Save for Retirement

Max out your 401(k) contributions for you and your employees to save on taxes. Employee contributions must be made before Dec 31 and be reflected on 2024 payroll.
Thinking about opening a ROTH 401(k)? Now’s a great time to do it for your business.

10. Adjust Your Income and Payments

If you have high profits in 2024, you may want to see if you can shift some income and expenses into the following year. Or vice versa if you have low income this year and expect higher income in 2025.
- Can you delay or accelerate invoicing and push some income into the next year or move some income into the current year.
- Review any big payments you’re waiting on, and decide if you need to delay or push to collect them before year-end.

11. Check Your Inventory and Bad Debts

Count your inventory and make sure your records match what’s on hand. Do you have any obsolete inventory or shrinkage you can write-off?
Write off any payments from customers you know you’ll never collect.

12. Manage Cash Flow and Loans

Review how much money you’ve taken out of the business and do a cash flow projection.
Make a plan to pay off loans or debts to eliminate interest payments

13. Plan for Next Year

Set goals for your business in the new year and create a budget to guide your spending.
For S Corporations, figure out a "Reasonable Salary" yourself for 2024 and 2025 to stay on the IRS’s good side. Run a catch-up payroll before year-end or pause year-end payroll if you need to make a correction.

14. Organize Your Records

Scan and file your receipts, tax documents, and other paperwork so you’re ready for tax season.
Update your corporate records, like meeting minutes and any required documents.
Take a moment to review your successes this year and think about ways to make your business run even smoother next year.

15. Hold a Board of Directors (or Advisors) Meeting

Why it’s important: If your business has a Board of Directors, you’re required to hold at least one meeting each year. Documenting this meeting in your official Board of Directors (BOD) Meeting Minutes ensures compliance—and the meeting itself can unlock tax-saving opportunities.
How to make it work:
- Plan a meeting and document it in your BOD Meeting Minutes. This not only meets compliance requirements but may allow you to write off associated expenses.
- Planning a trip? Hold the meeting during your trip, and you could write off part or all of the travel expenses as a business expense.
- Keep the meeting-related expenses reasonable and not extravagant—this is key to ensuring they’re deductible.
Pro Tip: Ask us how to add your spouse to your Board of Directors. Doing so may allow you to write off travel costs for both of you when you hold a meeting.
For LLCs and Sole Proprietors: You can do the same thing by forming a Board of Advisors. Document the meeting, keep records, and you could enjoy similar benefits. Ask us for details on how to set this up!

Don’t Forget State Law Changes

Some state laws for businesses may change in the new year, like retirement plan coverage, new minimum wages or sexual harassment training compliance. Take a moment to review what’s changing in your state so you’re not caught off guard.

What to Do Next

The end of the year is almost here—don’t wait to take action. Here’s how to get started:

Schedule an end-of-year review with your CPA to make sure everything is in order.
Make Pass-Through Entity Tax payments if your business has chosen this tax option.
File the FinCEN Beneficial Ownership Report if required, to avoid costly penalties.
Explore personal tax savings as well. Read more about our individual tax savings tips here.

The clock is ticking—take steps now to save on taxes and start the new year with confidence!

15 Tips | Year-End Tax Savings for Business Owners in 2024