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 with 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 2026.

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'll 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.

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

We recommend working collaboratively with your accountant throughout the year (monthly). Regular check-ins save time, stress, and money at year-end.

2. Buy any Necessary Equipment

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

Why?
Equipment purchased and placed into service before December 31, 2025, can be depreciated on your 2025 tax return.

• Bonus depreciation still allows you to write off up to 60% of the cost in the first year. 
• Even if you pay with a credit card or financing, you still qualify.

3. Review Your Inventory

Make sure your books reflect your actual inventory. If you haven't done a count yet, now's the time.

Here’s how:

• Conduct a physical inventory count and compare it to your records.
• Adjust your books accordingly.
• Identify obsolete or slow-moving inventory and consider discounting, donating, or writing it off.

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

4. Review Your Accounts Receivable

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

For accrual-based taxpayers, uncollected invoices still count as income.

• Send reminders and follow up with late-paying clients.
• Write off truly uncollectible accounts.
• Consider using a collection agency to recover older debts.

Cleaning up receivables now avoids paying tax on income you’ll never receive.

5. Review Your Accounts Payable

If you’re on a cash basis, paying bills before year-end lets you deduct those expenses for 2025.

• Pay outstanding bills by December 31st.
• You can even pay with a credit card and still deduct it now, even if the payment isn't due until later.
• Bonus: Earn credit card rewards/points while you’re at it.

If you have old, unpaid bills sitting in your books that you don’t intend to pay, now’s the time to clean those up to keep your records accurate.

6. Make Any Charitable Donations You Were Planning

'Tis the season of giving... and tax savings.

Charitable contributions, whether cash or in-kind (non-cash), can be deducted up to 60% of your adjusted gross income, depending on the type of donation and organization.

How to do it right:

• Make donations by December 31st.
• Get proper documentation (receipts, acknowledgement letters, etc.).
• Use a valuation guide for donated goods (equipment, fixtures, or other items) to assign a fair market value.

This is one of those rare win-win scenarios: You help others and reduce your tax bill at the same time. 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. Retirement contributions reduce your taxable income and build long-term wealth.

• 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 $70,000. 

If you don’t yet have a plan in place, you might be limited for this year. But now is a great time to start planning for 2026.

Check out our Business Retirement Plan Options guide to compare plan types and check limits.

8. Deduct Any Home Office Expenses

If you work from home or use your home for business, you may be eligible for a home office deduction.

To qualify, a portion of your home must be used regularly and exclusively for business.

You can deduct a share of:

• Rent or mortgage interest

• Utilities

• Insurance

• Repairs and maintenance

Or use the simplified method: Deduct $5 per square foot, up to 300 sq. ft. (maximum of $1,500).

9. Pay Your Taxes If You Expect to Owe 

If you know you’ll owe taxes, don’t wait until April. If you're able to, pay your estimated tax.

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

• Estimate what you’ll owe based on your 2025 income.
• Divide it into manageable weekly payments. (There are 15 weeks between January 1st and April 15th, so break it into chunks.)
• Set up automatic transfers to a savings account to stay on track.

The earlier you plan, the less painful the payment will be.

Start 2026 with Confidence

Taxes might not be festive, but handling them smartly can save you serious cash.

At Patrick Accounting, we simplify tax planning 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 to uncover the most common tax deductions you should be taking advantage of!