The year-end is already hectic for many businesses. Trying to finish up your bookkeeping and handling year-end tax planning can seem like something that can be pushed back. Try not to. 

Smart tax planning in the final months of the year can save your business money and prevent headaches during tax season. When you wait until the filing deadline approaches, you may miss opportunities to reduce your tax bill and risk making costly mistakes.

Taking time now to review your tax situation gives you two key advantages. 

First, you can make strategic moves to lower your tax liability while you still have time to act. Second, you’ll have breathing room to gather documents and organize records properly before you (and accounting professionals) get really busy. 

Year-end planning also helps you:

• Find tax deductions and credits you might otherwise miss
• Make informed decisions about business purchases and expenses
• Identify potential tax issues before they become problems
• Reduce stress during tax filing season
• Budget accurately for your tax payments

Whether you’re self-employed as a freelancer or independent contractor, or you have employees, investing time to organize your finances can really pay off. 

Nav does not provide legal or tax advice. Always consult with your tax professional or financial advisor for advice specific to your situation. 

Important Year-End Tax Deadlines for Small Businesses

Meeting tax deadlines is critical to running your business smoothly and avoiding costly IRS penalties. Here are the key dates you need to know as you wrap up this year and plan for next year.

Important: The Internal Revenue Service publishes federal income tax deadlines in Publication 509: Tax Calendars. Deadlines for the current tax year typically fall under the calendar for the following year. 

For example, the IRS 2024 Tax Calendar includes deadlines for 2023 tax forms. The 2025 calendar includes information for the 2024 tax year. The 2025 calendar is currently published as a draft and you should not rely on these dates without checking with the IRS and/or your tax advisor. 

In addition, some businesses use a fiscal year, rather than a calendar year. If you file your income tax return for a fiscal year rather than the calendar year, you must change some of the dates in this calendar.

2024 Due Dates

March 15: Partnership and S-corporation tax returns (Forms 1065 and 1120-S)

April 15: Individual and sole proprietor tax returns (Form 1040 and Schedule C)

April 15: First quarter 2024 estimated tax payment

June 15: Second quarter 2024 estimated tax payment

September 15: Third quarter 2024 estimated tax payment

January 31

Businesses must furnish employees with copies of Form W-2 for the previous tax year.

Businesses must file Form 1099-NEC for any non-employee compensation paid in the previous tax year.

February 28

Businesses must file information returns (like Forms 1099) for specific payments made during the previous tax year. Payments could include dividends, interest, rent, royalties, and more. 

March 17

Partnerships must file a calendar year return (Form 1065) for the previous year and provide each partner with a Schedule K-1 (Form 1065).

S corporations must file a calendar year return (Form 1120-S) for the previous year, pay any taxes due, and provide each shareholder with a Schedule K-1 (Form 1120-S).

April 15

Individuals must file their income tax returns (Form 1040 or 1040-SR) and pay any taxes due.

Corporations must file a calendar year income tax return (Form 1120) and pay any taxes due.

September 15

Partnerships that requested an extension must file their calendar year return (Form 1065).

S corporations that requested an extension must file a calendar year income tax return (Form 1120-S) and pay any taxes, interest, and penalties due.

October 15

Individuals who requested an extension must file their income tax return and pay any tax, interest, and penalties due.

Corporations that requested an extension must file their calendar year income tax return (Form 1120) and pay any tax, interest, and penalties due.

Again, for tax year 2024 filings due in 2025, this is based on a draft of IRS Publication 509 for the year 2025. These dates could potentially change. You may want to verify these dates by checking for updates on IRS.gov.

Remember, if any deadline falls on a weekend or legal holiday, it moves to the next business day. Mark these dates on your calendar now to avoid missing them.

Also note that the IRS sometimes offers tax relief by giving taxpayers an extension of time to file due to natural disasters. This can include: 

• Individuals whose principal residence is located in a covered disaster area and their spouse, if filing jointly.
• Business entities or sole proprietors whose principal place of business is located in a covered disaster area.
• Taxpayers not located in a disaster area but whose records necessary to meet a deadline to perform certain acts are maintained or located in a covered disaster area.
• Any individual visiting a covered disaster area who was killed or injured as a result of the disaster, or any other person determined by the IRS to be affected by a federally declared disaster.

For example, due to Hurricanes Milton and Helene, taxpayers in the entire states of Alabama, Florida, Georgia, North Carolina and South Carolina, and parts of Tennessee and Virginia, who received extensions to file their 2023 returns have until May 1, 2025, to file

See emergency and disaster declarations here. 

Maximize Tax Deductions Before Year-End

Smart year-end tax planning includes taking advantage of deductions before December 31. Here are key ways to reduce your taxable income while benefiting your business.

Equipment and vehicle purchases

If you need new business equipment, buying before year-end may provide tax savings. For 2023, your business may be able to:

• Deduct up to $1,160,000 in qualifying equipment purchases under Section 179
• Take advantage of 80% bonus depreciation on eligible assets
• Deduct business vehicle expenses using actual costs or the standard rate of 65.5 cents per mile

Home office deductions

If you work from home, from a place you use exclusively for business, you may be able to take a home office deduction. Filers can choose between the simplified method ($5 per square foot, up to 300 square feet) or the regular method, which lets you deduct actual expenses like utilities, insurance, and repairs.

Employee-related deductions

Talk to your accounting professional about whether it makes sense to ensure certain employee-related deductible expenses are made this year or next. 

For example, if you pay employee bonuses, you may want to do that before December 31, which allows you to deduct these expenses in the current tax year. 

You may also want to time payments for employee retirement accounts, health insurance premiums, or other employee perks. Of course, these deductions must be for legitimate business expenses and properly documented. 

Professional services and business expenses

You may be able to prepay expenses for your business, such as: 

• Professional fees for lawyers, accountants, or consultants
• Business insurance premiums
• Marketing and advertising costs
• Professional development and training
• Subscriptions and memberships

The IRS requires that expenses be “ordinary and necessary” for your business to qualify as deductions. Also, keep detailed records including receipts, invoices, and documentation showing the business purpose of each expense.

Take time now to review your expenses for the year and identify areas where additional spending could benefit both your business and your tax situation.

Organize Your Financial Records for Tax Filing

Getting your financial records in order now saves time and can mean less stress during tax season. A well-organized system also helps you claim legitimate deductions and helps make it easier in case of an audit.

Essential records to gather 

Create separate digital or physical folders for:

• Income records (sales receipts, invoices, 1099s)
• Expense receipts organized by category
• Bank and credit card statements
• Payroll documents and contractor payments
• Vehicle mileage logs
• Asset purchase records
• Previous tax returns
• Small business loan details 

Digital organization tips 

One of the safest ways to store your receipts is digitally, using cloud-based storage. This can make it easier for your accountant to access records, and can allow you to access those records anywhere. 

Consider using these tools to streamline recordkeeping:

• Bookkeeping tools / accounting software for tracking income and expenses
• Receipt scanning apps that capture and organize receipts automatically
• Mileage tracking apps
• Cloud storage services to back up important documents
• Digital filing systems with clear naming conventions for easy retrieval

Read: 5 Simple Ways to Organize Your Small Business Finances

Monthly financial tasks 

You get to the end of the month or the end of the year, and you’re trying to figure out where your money went. Maybe there’s a credit card charge that you can’t place. 

It will be a lot easier to track your income and expenses, and to make better decisions about your money when you regularly set aside time to review transactions. 

A great place to start is to commit to reconciling your bank accounts and credit cards each month. (Weekly is good too!) This helps you make sure you have the information you need about receipts, and can help you catch mistakes or unauthorized charges quickly. A regular review gives you a clear picture of your cash flow.

Take time to review and categorize your expenses while they’re fresh in your mind. When you wait too long, it becomes harder to remember the business purpose of each purchase. File your receipts and invoices right away, whether you use a digital system or physical files. This simple habit prevents the year-end scramble to find missing documents.

Make it a priority to back up your digital records each month. Whether you use cloud storage or external hard drives, regular backups protect your important financial data. 

Finally, get in the habit of running basic financial reports like profit and loss statements or accounts receivable aging reports at least quarterly so you can review them and make adjustments to spending, pricing, or advertisements.

To summarize, stay organized throughout the year by:

• Keeping up with bookkeeping 
• Reviewing and categorizing expenses
• Filing receipts and invoices as soon as possible
• Backing up digital records
• Running basic financial reports

Year-end review checklist 

If you’ve been keeping up with your financial tasks throughout the year, the year-end tasks become a lot easier. Before tax season begins:

• Double-check that all transactions are properly recorded and ask your accountant for help where there are gaps
• Ensure you have supporting documents for all deductions
• Create summaries of key business metrics
• Make copies of important documents and make sure they are safely stored

Not only will getting organized make you feel more confident as a business owner, you’ll save time in the long run because you aren’t digging for records or missing out on deductions. 

Top Business Tax Deductions in 2024

Common Year-End Tax Mistakes to Avoid

Many small business owners accidentally increase their tax bill or create problems with the IRS through simple oversights. Here are key mistakes to avoid as you plan your year-end taxes.

Poor record keeping 

This is a big one, and it’s understandable. When you start a business, you’re often so busy trying to make sales or keep up with clients, that your own tasks get pushed to the bottom of the list, where they pile up. 

Failing to keep records may lead to missed tax deductions. 

Another common error is mixing personal and business expenses, which can create serious issues during an audit. 

Having a system for backing up important documents is also crucial – lost or destroyed records can lead to denied deductions.

Set up your systems and keep up with your bookkeeping so you don’t: 

• Miss receipts for business expenses
• Fail to track business vehicle mileage
• Mix personal and business expenses
• Wait until tax time to gather your records
• Lose receipts or other documentation

Miscalculating income and deductions 

It seems unlikely that you would lose track of income, right? You’d be surprised. If you are using multiple accounts (business bank account, Paypal, Venmo etc.), it may be easy to overlook or mischaracterize income. 

You may also lose out on tax deductions because you don’t fully understand which expenses qualify, or on the flip side, take deductions that your business isn’t entitled to take. 

Watch out for questionable business tax deduction advice.

Avoid these traps:

• Forgetting to include all sources of business income
• Missing valid tax deductions due to poor tracking
• Taking deductions without proper documentation
• Claiming personal expenses as business deductions
• Not understanding which expenses qualify for deductions

Employee classification problems 

How many times have you seen someone mentioning “1099 employees”? It’s not the same thing. One of the most serious errors is misclassifying employees as independent contractors, which can trigger audits and back taxes. Businesses sometimes forget to issue 1099s to contractors who earned $600 or more, or they miss critical payroll tax deposit deadlines. 

The IRS (and state taxing authorities) take payroll tax obligations very seriously, and simple errors can create major problems if you don’t catch them soon enough. Avoid:

• Misclassifying employees as independent contractors
• Not issuing 1099s to contractors who earned $600 or more
• Missing payroll tax deposit deadlines
• Making mistakes in payroll tax calculations

If you pay any employees via payroll (including yourself), it’s going to be a lot easier to use a payroll service to help make sure your business complies with all the requirements. Fortunately, these solutions are more affordable than ever. 

Remember, if you’re unsure about any tax-related decisions, it’s better to consult a tax professional now than face problems during an IRS audit later. A small investment in professional advice can be well worth it.

How to Prepare for Next Year’s Tax Season

If your resolution is to make your business easier and more profitable next year, start with your financial record-keeping. 

Fortunately, apps and other tools can make this a lot easier. Consider setting up the following as early as possible:

• Bookkeeping and accounting software to track income and expenses
• Expense tracking apps to capture receipts on the spot
• Mileage tracking apps if you will be driving for business

Develop a system that works for you. It might mean carving out time at the end of the week to check your credit card and bank statements, and enter your expenses if you want to do bookkeeping yourself. Or it might mean reviewing your accounts if you’ve hired someone else to do your bookkeeping. 

Either way, put it on your calendar and make time to keep up. 

Get Help With Year-End Taxes

Getting professional help with your taxes can save you money, avoid expensive mistakes, and give you peace of mind. Though it’s tempting to save money by handling taxes yourself, the U.S. tax laws are complex, and it’s easy to make mistakes. 

Consider working with a tax professional if you feel overwhelmed by tax requirements or if your business has gone through major changes this year. Professional guidance is also crucial if you need help with tax planning strategies or want to ensure you’re claiming all eligible deductions. If you’ve received notices from the IRS, it’s especially important to get expert help quickly.

Look for someone who has experience with small businesses in your industry and holds proper credentials such as CPA, EA, or licensed tax preparer. The best professionals offer year-round tax planning, not just tax preparation. They should communicate clearly, respond promptly, and have good reviews or recommendations from other business owners.

Make note of any questions or concerns you have about your business taxes. Be ready to discuss any significant changes in your business and your goals for the coming year.

While professional tax help is an extra expense, with the right advice, the benefits often outweigh the costs. (And their fees should be tax-deductible as a business expense.)

How Nav Can Help

Nav Prime makes bookkeeping a breeze. Organize expenses and get profit and loss statements in a click and get real-time financial insights to help you make better decisions about your business. 

Plus, learn how to establish business credit and monitor your business and personal credit in one dashboard. 

Cash Flow Health lets you track all your accounts in one place, and get an easy-to-scan snapshot of your spending categories so you know where to cut back and where to invest more.

Get started now. 

Frequently asked questions

How can I reduce my business taxes at the end of the year?

While you don’t want to wait until year end to review taxes, financial moves in the final months of the year may help to significantly reduce your tax bill. Start by reviewing major business purchases you need to make, like buying equipment or inventory before the end of the year.  

Look for opportunities to prepay next year’s expenses, like insurance premiums or professional subscriptions. You can also make contributions to your retirement accounts, which reduces your taxable income.

Pro tip: Consider using a small business credit card with perks like cash back or travel rewards for even more benefits. 

Consider deferring income by waiting until January to send December invoices or collect payments. Just make sure any tax-saving moves align with your overall business goals and cash flow needs. Working with a tax professional is a great way to identify strategies specific to your situation.

How to minimize taxes for small businesses?

Minimizing taxes requires year-round planning, not just at the end of the year. Start by keeping detailed records of all business expenses; many business owners miss deductions simply because they don’t track expenses properly. Take advantage of common deductions like home office expenses, mileage, and business insurance. If you have employees, look into tax credits for providing health insurance or retirement plans.

Make tax planning part of your regular business routine. Review your tax situation quarterly with your accountant to identify opportunities and avoid surprises. Consider your business structure too. For example; changing from a sole proprietorship to an LLC taxed as an S-corporation, may allow your business to pay fewer payroll taxes.

How can I avoid owing taxes at the end of the year?

The key to avoiding a big tax bill is planning ahead with estimated tax payments. Set aside money each month for taxes. Many business owners save 25-30% of their income for taxes, though your specific percentage may vary. Make quarterly estimated tax payments to stay current with the IRS.

Keep close track of your income and expenses throughout the year so you can adjust your tax planning if needed. If your income is higher than expected, you might need to increase your estimated payments or look for additional deductions. 

Consider working with a tax professional who can help you project your tax liability and plan accordingly.

What receipts should I keep for small business taxes?

Keep receipts for every business expense you plan to deduct. This includes obvious expenses like inventory purchases and office supplies, but don’t forget items like business meals (50% deductible), professional development courses, and even the portion of your phone bill used for business. For vehicle expenses, maintain a mileage log along with receipts for gas, repairs, and insurance.

Store receipts in an organized system, either physically or digitally. Many accounting apps let you scan and categorize receipts automatically. Follow IRS guidelines for Save documents for at least three years from the date you file your return or two years from when you paid the tax, whichever is later. For assets like equipment or vehicles, keep records for the entire time you own the asset plus three years.

Small Business Year-End Tax Planning Checklist

Nav does not offer tax or legal advice. Talk with your tax professional for advice specific to your situation and business. 

Financial Records Organization

• Reconcile all bank and credit card statements
• Review accounts receivable and follow up on unpaid invoices
• Review accounts payable and plan payments
• Ensure all receipts are properly filed and categorized
• Back up digital financial records
• Organize payroll records and tax deposits
• Review vehicle mileage logs
• Gather documentation for asset purchases and sales

Year-End Tax Deductions

• Review potential Section 179 deductions for equipment purchases
• Calculate and document home office expenses
• Plan year-end bonus payments to employees
• Make planned charitable contributions
• Pay outstanding bills for deductible expenses
• Make retirement plan contributions
• Schedule any needed equipment or vehicle purchases
• Review inventory for obsolete items that can be written off

Employee and Contractor Documentation

• Verify employee classifications (W-2 vs. 1099)
• Update employee information and W-9 forms
• Review benefit plan documentation
• Prepare for W-2 and 1099-NEC distribution
• Document any fringe benefits provided
• Review payroll tax deposits and filings

Tax Planning Strategies

• Meet with tax professional to review tax situation
• Consider deferring income to next year
• Plan accelerated expense payments if beneficial
• Review business structure for potential tax advantages
• Calculate estimated tax payments needed
• Plan owner’s compensation and distributions
• Review depreciation options for business assets

Compliance and Deadlines

• December 31 – Last day for tax-deductible expenses
• January 31 – W-2s and 1099s due to recipients
• January 31 – Fourth quarter payroll returns due
• January 31 – Federal unemployment tax return due
• March 15 – Partnership/S-Corp returns due
• April 15 – Individual/Sole proprietor returns due

Planning for Next Year

• Set up tax payment schedule for next year
• Create new filing system for receipts and documents
• Review accounting software needs
• Schedule regular financial review meetings
• Plan major purchases and investments
• Update business plan and budget
• Schedule quarterly tax planning reviews

Important Information to Gather

• Previous year’s tax returns
• Employer Identification Number (EIN)
• Business formation documents
• Vehicle information for mileage deductions
• Home office measurements and expenses
• Asset purchase documentation
• Loan documents and statements

Notes:

• Keep this checklist with your tax records
• Check off items as you complete them
• Add specific items unique to your business
• Share relevant items with your tax professional
• Review deadlines regularly – dates may change if they fall on weekends or holidays