I will always remember the wise words of an old mentor/boss who told me many years ago, “We can do more for our clients in November and December than we can in March and April.”

After year-end, with the exception of a very short list of strategies to reduce tax, there isn’t much we can do to help our clients save on taxes. At that point, our work is determining what the final income statement and balance sheet looks like on December 31 and then reporting those numbers appropriately on the tax forms. This is the essence of compliance work.

Before year-end is a different story. Within the confines of the rules as laid out by Internal Revenue Code, deferring revenue or prepaying expenses is a common strategy for cash basis businesses. Considering fixed asset additions and determining the corresponding depreciation deduction to manage or “massage” the bottom line is something I’ve done for clients every year that I have been in practice as a CPA. Retirement plan contributions and year-end bonus payouts are a couple other commonly occurring events that can be used to adjust the bottom line.

In addition, year-end planning can not only help save on taxes but it gives small business owners valuable information about what they can expect to pay or receive back in a refund on tax day.