What to Do Now So There Are No Surprises in April

our year-end checklist should cover your numbers, tax projection, purchases, owner compensation, retirement options, bookkeeping, and missing records. Review each item before December 31, while you still have time to act.

Many decisions that shape your April tax bill happen in Q4. The right next step depends on your business, so use this checklist to prepare for a focused conversation with your tax professional.

Your small business year-end checklist

1. Review your year-to-date numbers. Look at profit, cash flow, and accounts receivable (AR). For example, if your business has brought in $240,000 and spent $168,000 so far, that’s $72,000 in profit before other adjustments. If customers still owe you $18,000, remember that unpaid invoices are not cash in the bank. Your current cash balance and upcoming bills matter, too. The structure of your account, cash or accrual, will impact how these get taxed.
2. Project your tax and compare it with payments made. Ask your tax professional to estimate your full-year tax, including relevant income and self-employment taxes, then compare that figure with withholding and estimated payments. For example, if your projected total is $28,000 and you’ve paid $19,000 so far, there’s a projected $9,000 gap to discuss. That estimate may change, but reviewing it now gives you a chance to plan. The IRS explains who generally needs to pay estimated taxes and how underpayments can lead to a penalty. The fourth individual estimated-tax installment is generally due January 15, 2027, so confirm your situation and next steps before then.
3. Review necessary purchases before year-end. If your business genuinely needs equipment, software, or professional services, ask whether timing the purchase or service before December 31 makes sense. For equipment, a purchase alone may not be enough as the item may need to be placed in service, ready and available for business use, by year-end to qualify for a 2026 tax benefit. Rules vary, so confirm the treatment first. Make the purchase for a real business need, not just for a deduction.
4. Check owner compensation and entity structure. If your business is taxed as an S corporation, review your owner-employee salary before the payroll year closes. The IRS says S corporations must pay shareholder-employees reasonable compensation for services before making non-wage distributions. This is also a good time to ask whether your current structure still fits your business.

1. Explore retirement plan options. A SEP IRA or solo 401(k) may suit some business owners, but eligibility, contribution limits, setup rules, and deadlines differ. Some plan setup steps or employee-deferral elections may need to happen by December 31 while other contributions may be allowed later. And keep in mind those that need to be set up before year-end also may need some lead time to create!
2. Reconcile your books. Match bank and credit-card accounts to your records. Review unpaid invoices and bills, payroll, and loan balances. Clean books make your tax projection more reliable and help your year-end close go smoothly. Our bookkeeping services include reconciliations and year-end preparation.
3. Collect missing records now. Gather business receipts, equipment invoices, contractor payment details, and any missing vendor W-9s. Organize supporting documents while the transactions are still fresh. Looking for them in April can add stress and slow down filing.

Your next step

The above items are a snapshot to help you get started and we can further help you organize these decisions. Contact us to book a free introductory call if you’d like to discuss your business’s next steps.

For a broader overview, read our September article, “What Should a Small Business Do Financially Before Year-End?”

Quick answers

When should I start my small business year-end checklist?
Start now. Reviewing your numbers before December 31 gives you more time to assess eligible planning options.

Does buying equipment before year-end guarantee a tax deduction?
No. The tax treatment depends on the item, business use, timing, and applicable rules. Ask a tax professional before relying on a deduction.

Can I still make a retirement contribution after December 31?
Sometimes. Deadlines depend on the plan and the type of contribution. Some setup steps or elections may be due by year-end, so check your specific plan promptly.

This checklist is general information, not individualized tax advice. Your options and deadlines may differ based on your business, tax year, and state.

Subscribe to our newsletter for practical tax and financial guidance for your business. Find us through Refined Tax Horizons.