Close the Year Right. Start the Next One Even Better
There’s a reason the end of the year feels stressful for so many entrepreneurs. And no, it’s not just the holidays, travel, or trying to figure out where you hid the receipts for that “business lunch” back in March. It’s the pressure of closing out one year and preparing to begin another.
But here’s the thing: this stretch of the calendar doesn’t have to break you. In fact, if you approach it intentionally, it can become one of the strongest mental-fitness seasons of your entire year.
Let’s walk through the smart business owner’s year-end checklist before it’s crunch time, before deadlines hit, and before you find yourself scrambling in the final hours of December.
1. Review and Update Your Financial Records
Too many business owners run their companies by simply checking the bank account.
Do I have money today?
Can I buy this equipment?
Did I invoice that client or did I… just think about invoicing them?
It’s time to get your books in order. You need every income item recorded. You need every expense and deduction properly categorized. And you absolutely need your accounting software (QuickBooks, Xero, whatever you use) to reflect your true operational financial position, not just the cash in your bank.
This means reconciling accounts, eliminating discrepancies, reviewing every invoice sent and received, and making sure no payment, no receipt, and no little crumpled-up expense tucked in your glove compartment slips through the cracks.
This is how you avoid surprises. It’s how you know your actual taxable position. And it’s how you start making smart decisions for both the close of this year and the start of the next.
2. Maximize Deductible Expenses… Intentionally
Notice I didn’t say “go spend money so you can save on taxes.”
Buying a truck you don’t need is not a tax strategy. But maximizing legitimate, necessary, properly categorized expenses? That is a smart year-end move.
If you need equipment, software, tools, desks (whatever helps you operate) you need those items entered and accounted for. For some things, like qualifying equipment, Section 179 depreciation can give you a powerful tax benefit even if you buy the asset on the last day of the year.
But you can’t take advantage of these opportunities if you don’t know where you stand financially. That’s why Step 1 matters so much. Work with a tax planner. Have them help you determine whether a purchase is worth making now or later. Don’t guess your way into tax savings… You’ll almost always guess wrong.
3. Make Retirement Contributions While There’s Still Time
Whether you're using a SEP, a Roth, a solo 401(k), or another retirement plan, the earlier you get your money into the account, the better.
And yes, many plans let you contribute all the way until April 15 of the following year. But delaying means missing months of market gains that could have compounded for your future.
A simple example:
If a sole proprietor contributes $10,000 to a 401(k), that’s an immediate deduction and increased retirement security for later. You’re lowering taxable income while building future wealth. That’s the kind of double win you want to be taking advantage of.
The theme here? Don’t procrastinate. Don’t miss deadlines. Don’t leave opportunities on the table.
4. Evaluate Your Income Timing
Your income patterns matter - more than most business owners realize.
Are you seasonal? Do you experience big spikes? Are you a traditional accounting firm that earns 60% of revenue in February-May? A construction company that lands huge contracts in bursts? A snow-plowing service that earns half the year’s revenue in 90 winter days?
The timing of when you earn and when you collect can radically change your tax picture.
I’ve seen construction companies defer income by a few days, pushing a massive payment into January instead of December just to avoid a major tax hit. That kind of strategy has to be done correctly and legally, but the options exist.
Know your numbers. Study historical patterns. Work with an advisor who can help you decide whether to defer income or accelerate deductions. You don’t have to fight this battle alone.
5. Conduct a Year-End Tax Planning Meeting
This one’s simple: you need a professional to review your year-end position and tell you exactly where you stand.
No surprises.
No guessing.
No “I think we’re good.”
Get a clean estimate of your liability, explore final tax-saving opportunities, and get clarity before you close your books for the year.
6. Year-End Checklist to Start the New Year Strong
Once the year closes, your work isn’t done. In fact, you’re just shifting into the next phase of the cycle.
Here’s what every business owner should do at the start of a new year:
Set goals and build a real budget
Organize all tax documents
Update payroll and employee benefits
Plan major investments early
Schedule a forward-looking tax strategy session
Be Prepared. Take Action. Lead Your Business Intentionally.
Everything I’ve listed above prepares you to lead, not react. To build strength, not stress.
To approach the close of one year and the start of another with clarity, not chaos.
Write these steps down. Review them. Take action on them. If you’re looking for more practical, straight-talk guidance on business, leadership, and long-term success?
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