9 Year-End Tax Tips to Save You Money and Stress

Cue the confetti, holiday chaos, and Amazon deliveries.

We know the end of the year feels like a sprint to the finish line—holiday parties, kids out of school, random boxes you don’t remember ordering.

Taxes? They’re probably the last thing on your mind. But year-end tax planning doesn’t have to be stressful. A few smart moves now will set you up for a smoother, more profitable 2024.

Here are 9 practical year-end tax planning tips for business owners looking to reduce their upcoming tax bill or at least prepare for what they will owe.

1. Review Your Annual Income and Expenses 

If your financials are incomplete or disorganized, you’re already at a disadvantage.

Start by reviewing everything you earned and spent this year:

• Hunt down missing receipts, invoices, and payments.
• Double-check that everything is accounted for in your books.

 If it’s not recorded by December 31st, it doesn’t exist for tax purposes. No deductions, no benefits, and a big headache come tax time.

We recommend working collaboratively with your accountant monthly, so you don’t have to scramble to gather all this at year-end. Working with your accountant consistently saves time, stress, and money.

2. Buy any Necessary Equipment

If your business needs new tools, computers, or equipment, now is the time to buy.

Why?

• Equipment you purchase and put into service before December 31st can be depreciated on your 2024 taxes. 
• Bonus depreciation still allows you to write off up to 60% of the cost this year. 
• Even if you pay with a credit card or financing, you still qualify.

3. Review Your Inventory

Make sure the inventory in your books is accurate. If you still need to do an inventory count, be sure to do so before the end of the year and adjust your books accordingly. Here’s what to do:

• Conduct a physical inventory count and compare it to your books.
• Adjust your records to match reality.
• Identify obsolete inventory and decide whether to discount, donate, or write it off.

Accurate inventory keeps your tax return clean and may uncover opportunities to clear out old stock and improve cash flow.

4. Review Your Accounts Receivable

If you’re sitting on unpaid invoices, now’s the time to address them.

For accrual-based taxpayers, unpaid invoices still count as income—even if you never collected the cash. 

• Send reminders or follow up with clients who owe you money.
• Write off uncollectible accounts if you’re on accrual-based accounting.

If you have an accrual method of accounting for tax purposes, you have likely paid taxes on invoices you have yet to collect. Now is an excellent time to clean up the list of your uncollectible receivables. An even better tip is to use a collection agency to get the money owed to you.

5. Review Your Accounts Payable

If you’re on a cash basis, paying bills before year-end lets you deduct those expenses for 2024.

Pay Outstanding Bills Before Year-End

• Pay with a credit card to get the deduction now and settle the bill later.
• Rack up credit card points or rewards while you’re at it.

Have some unpaid bills sitting in your accounts payable that you don’t intend to pay? Now’s the time to clean those up and make sure your records are accurate.

6. Make Any Charitable Donations You Were Planning On 

The season of giving can also be the season of tax savings. Charitable contributions—cash or non-cash—are deductible up to 50% of your adjusted gross income.

How to do it right:

• Make donations by December 31st and get proper documentation.
• Donate equipment, fixtures, or other items, but use a valuation guide to assign a fair market value.

This is one of those rare win-win scenarios: you help others and reduce your tax bill. Be sure to detail what you contributed and use a simple thrift store pricing guide.

Here’s our charitable valuation guide to help determine the amount you can deduct.

7. Maximize Your Retirement Contributions 

If you have a retirement plan in place, now’s the time to contribute as much as possible. Contributions reduce your taxable income and help you save for your future. 

• Contribute the max to existing 401(k), SEP IRA, or SIMPLE IRA plans. 
• For SEP IRAs, you can contribute up to 25% of your compensation or $66,000 (whichever is less). 

If you don’t have a retirement plan set up, you may be limited for 2024, but now is a great time to plan for next year so go ahead and start the process.

8. Deduct Any Home Office Expenses

If you use your home for business, you deserve the write-off.

If you use part of your home exclusively and regularly for your business you can claim a portion of your rent, utilities, insurance, and other expenses based on the size of your home office. 

• Deduct a percentage of rent, utilities, insurance, and other home costs based on office size.
• Simplified Method: Deduct $5 per square foot of office space, up to 300 sq. ft.

9. Pay Your Taxes If You Expect to Owe 

If you know you’ll owe taxes, don’t wait until April.

If you can, pay your estimated tax.

Paying your last estimated tax installment by January 15th helps you avoid penalties for underpayment.

• Estimate what you’ll owe.
• Divide it into manageable weekly payments. (There are 15 weeks between January 1st and April 15th—break it into chunks.)
• Set up automatic transfers to a savings account to stay on track.

The more automated it can be, the better.

Start 2025 with Confidence

Taxes might not be festive, but getting them right can save you serious cash. At Patrick Accounting, we simplify the process so you can focus on running your business—not running from tax surprises.

Ready to keep more of your hard-earned money?

Download our guide now and uncover the most common tax deductions you should be taking advantage of!