Year-End Tax Planning: What to Ask Your CPA

You finally get a quiet moment to look at the business account, and there’s money in it. You made payroll, your clients are paying, and the year is turning out better than you expected. You deserve to enjoy that progress.

Then comes the question: how much of that money is actually available to use? Year-end tax planning helps you answer that before you commit the cash somewhere else. Through a business consultation, I help you connect that tax conversation to the business and life you’re building. You don’t need to become a tax expert. What you need is a forward-looking conversation with your CPA or another qualified tax professional, current information, and enough time to carry out the decisions you make together.

Year-End Tax Planning Is Different From Filing Your Return

Your tax return reports what already happened. A planning meeting looks ahead, asking what you expect to happen next and which decisions are still on the table. Your CPA may offer both services, but don’t assume your tax-preparation engagement automatically includes a year-end projection. It’s worth asking directly whether you can schedule a meeting to project this year’s taxes and identify decisions to make before year-end, what information they’ll need from you, and whether that work is included in your current engagement.

Late October or early November is a good target. That gives you time to gather records, compare options, and coordinate with payroll or your retirement-plan provider. If any decision has an earlier deadline, ask about it now instead of waiting for the meeting.

That doesn’t mean every opportunity disappears when the calendar turns. The IRS, for example, allows a SEP retirement plan to be established by the business’s tax-return deadline, including extensions. Other elections, payroll actions, and plan requirements follow their own timelines, so your meeting should leave you with the specific deadlines that apply to you. The key is putting planning on the calendar as a clearly defined service, with enough time to act on the advice before those deadlines arrive.

Bring Four Key Numbers, Not Just Your Bank Balance

You don’t need perfect projections to start the conversation, but you do need records that separate what’s already happened from what you expect. Along with current financial statements and last year’s return, bring four numbers, or the records needed to calculate them.

The first is your projected taxable income. Revenue isn’t profit, and business profit isn’t necessarily your household’s taxable income. If you file jointly, your spouse’s wages and other income belong in the projection too, so ask your CPA to calculate the right figure rather than guessing from your checking account.

The second is what you’ve already paid. Gather your federal and state estimated-payment confirmations and current withholding records for you and, if it applies, your spouse, including payment dates. Taxes generally have to be paid as income is earned or received, not simply whenever you file.

The third is last year’s total tax. Bring the actual return, not just the amount you paid at filing, because a $4,000 balance due at filing is very different from a $40,000 annual tax liability. To avoid an underpayment penalty, the IRS generally looks at whether you paid at least the smaller of 90% of this year’s tax or 100% of last year’s. That second figure rises to 110% if your prior-year adjusted gross income was over $150,000 ($75,000 if married filing separately). Your CPA should confirm your eligibility and payment timing, since paying enough by year-end may not prevent a penalty if earlier installments were late.

The fourth is your retirement contributions so far. Note the contributions you’ve already made, the payroll elections in place, and any additional cash you could realistically commit. Ask what your plan allows and what employee contributions, administrative work, or other costs an employer contribution would involve. Eligible employees can change the math considerably. Most SEP plans require employer contributions at the same percentage of compensation for every eligible participant, including you, so your CPA should double-check the compensation calculation, especially if you’re self-employed.

If your books stop in June, your first job is getting them current. A projection built on missing expenses or unrecorded income gives you far less useful information, no matter how skilled the person running the numbers is. Giving your CPA a current picture of your income, payments, prior-year tax, and retirement funding lets the meeting focus on decisions instead of hunting for missing records.

The Question That Matters More Than “What Can I Write Off?”

Start with a baseline. Ask your CPA what they project you’ll owe if you make no additional changes, and when you’ll need to pay it. From there, you can explore which reasonable alternatives would change that result.

Here’s a simple illustration. Say your projected federal tax is $60,000, you’ve already paid $38,000, and another $8,000 will be withheld before year-end. That leaves a projected $14,000 gap. It’s a cash-planning estimate, not a ruling on whether your installments were on time or whether you’ll owe a penalty. Knowing that number now gives you a choice about cash you might otherwise distribute, invest, or spend. Ask your CPA to separate the amount needed to meet payment requirements from the total you expect to owe, since those aren’t always the same.

From there, the conversation can go deeper. Ask which deductions or credits depend on your projected income and whether you’re close to a relevant threshold. Find out whether an affordable retirement contribution would change the outcome, and what it would cost and when it’s due. Ask whether your withholding or estimated payments should change based on when income and payments are coming in. And find out what new information would change the projection and when you should update it.

For eligible business owners, the qualified business income deduction is a good example of a rule affected by taxable income and other limits. The IRS describes it as a deduction of up to 20% of qualifying income, not an automatic 20% deduction for every business. Ask whether it applies to your actual situation before trying to get “under a threshold.”

It’s also important to resist buying something just because it’s deductible. In a deliberately simplified example, a fully deductible $10,000 purchase at a 24% marginal federal rate cuts your federal income tax by $2,400, ignoring other tax effects. You’ve still spent $7,600 after that benefit, so the purchase needs a real business purpose beyond shrinking your tax bill. A useful tax strategy supports a decision that’s worth making on its own, with the tax effect, cash requirement, and deadline clearly understood ahead of time.

One Tax Decision Touches Four Parts of Your Business

When I review your plans, I want the tax recommendation to fit the rest of your business. A deduction is one consideration, not the whole decision, and it connects to your legal, insurance, financial, and tax picture all at once.

On the legal side, if the plan involves changing compensation, hiring a family member, adding an owner, or buying equipment, you’ll want to know what agreements, approvals, and records are needed. Your tax professional evaluates the tax treatment, and I help you handle the legal structure and obligations. Neither of us should be discovering the decision after you’ve already put it in place.

Insurance comes into play too. A planned equipment purchase, a new hire, or an expanded service can change what your business needs insured, so check with your insurance professional before committing to see whether coverage, limits, or premiums would be affected. Those costs belong in the decision about whether the purchase or expansion truly serves your goals.

Financially, compare any strategy against payroll, debt payments, operating reserves, and your household needs. A $30,000 retirement contribution isn’t comfortably funded just because the account holds $35,000 today. If $20,000 of payroll is due next week, the timing needs attention before any money moves.

Finally, on the tax side, ask your CPA to document the expected treatment, eligibility requirements, implementation deadlines, and the assumptions behind the projection. Retirement-plan rules, entity type, employee coverage, and state taxes can all change the answer. If payroll or a plan administrator needs to act, confirm who will contact them and by when. When legal, insurance, financial, and tax decisions all support the same business goal, they stop quietly competing for the same cash.

Every Decision Needs an Owner and a Date

Before the meeting ends, turn each decision into a concrete action: what happens, who owns it, what it costs, and when it has to be done. “Consider increasing retirement contributions” is just a discussion point. “Request the plan administrator’s contribution calculation and implementation deadlines this week” is a real next step.

Set a follow-up trigger as well. A new contract, a delayed payment, an unexpected expense, or a change in your spouse’s income can quickly make the original projection outdated, so ask your CPA when they’d like updated numbers instead of treating the estimate as a promise.

This approach protects your TEAM: your Time, Energy, Attention, and Money. You spend less of each scrambling to reassemble records at the last minute, and more of it making thoughtful decisions with the people qualified to help you. In the end, the value of a year-end tax planning meeting comes from the decisions you understand and the actions someone actually completes.

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