Most small business owners overpay taxes for one simple reason: they wait too long.
Tax savings don’t happen in April. They happen before December 31. Once the year closes, most opportunities disappear.
If you want to legally reduce your tax bill, these are the strategies you must understand and act on before year-end.
1. Get Your Books Clean Before Making Any Tax Moves
Tax planning without clean books is guessing.
If your income, expenses, or payroll numbers are wrong, every tax strategy built on them collapses.
What to do now:
Reconcile bank and credit card accounts Categorize all transactions correctly Confirm income totals Fix any negative or suspicious balances
Reality check: If your books aren’t clean, stop reading and fix that first.
2. Maximize Business Deductions (Most Owners Miss These)
Every legitimate business expense reduces taxable income but only if it’s tracked properly.
Commonly missed deductions:
Software subscriptions Business mileage Home office (when eligible) Phone and internet (business portion) Professional fees (bookkeeping, tax prep, legal) Education and training Advertising and marketing
If you didn’t track it, you can’t deduct it. Period.
3. Accelerate Expenses Before Year-End
Timing matters.
You can lower this year’s tax bill by paying certain expenses before December 31.
Examples:
Software renewals Professional services Office supplies Marketing costs Equipment purchases
This strategy works best for cash-basis taxpayers — and only when done intentionally.
4. Delay Income (When It Makes Sense)
In some cases, pushing income into the next year can reduce your current tax liability.
This may include:
Delaying invoicing Holding off on deposits Scheduling income collection strategically
⚠️ This must be done carefully and legally. Poor execution creates IRS problems.
5. Take Advantage of Section 179 and Bonus Depreciation
Buying equipment before year-end can generate major tax savings.
Eligible assets may include:
Computers and laptops Office furniture Machinery and tools Business vehicles (with rules)
Instead of depreciating over years, you may deduct a large portion this year.
Warning: Buying things just for deductions is a bad idea. Buy only what your business actually needs.
6. Review Your Business Structure
Your entity type affects how much tax you pay.
Many business owners operate as:
Sole proprietors Single-member LLCs
…when they should be:
S-Corporations
An S-Corp can reduce self-employment taxes once profitability supports it.
This is one of the biggest missed tax-saving opportunities — and one of the most abused when done incorrectly.
7. Maximize Retirement Contributions
Retirement plans reduce taxes and build long-term wealth.
Depending on your business, you may qualify for:
SEP IRA Solo 401(k) Traditional IRA
Contributions may be deductible and can significantly lower taxable income.
8. Don’t Forget Payroll and Owner Compensation Planning
If you pay yourself incorrectly, you’re likely overpaying taxes.
Before year-end, review:
Owner draws vs payroll Reasonable salary (for S-Corps) Payroll tax filings Estimated tax payments
Missteps here trigger penalties and audits.
9. Use Tax Credits (Not Just Deductions)
Credits reduce tax dollar-for-dollar, making them more powerful than deductions.
Examples include:
R&D credits Work Opportunity Tax Credit Energy efficiency credits Paid family leave credits
Many businesses qualify and never claim them.
10. Work With a Professional Before It’s Too Late
Year-end tax planning is not DIY territory.
A professional can:
Identify missed opportunities Model tax scenarios Prevent costly mistakes Align bookkeeping with tax strategy
Waiting until tax season limits what can be done and costs you money.
If you’re reading this in November or December and haven’t reviewed your numbers yet, you’re already behind — but not out of options.
The businesses that pay the least tax don’t “find loopholes.”
They plan early and execute intentionally.
Call to Action
💰 Want to know how much you can legally save before year-end?
👉 Schedule a free tax strategy session with BnB Consulting.
We’ll review your books, your structure, and your goals and help you keep more of what you earn.
