If your approach to taxes starts and ends in the first quarter of the year, you may be missing out on significant opportunities to reduce your tax bill, improve your cash flow, and make smarter financial decisions.
Tax planning shouldn’t be a once-a-year scramble—it should be a year-round strategy woven into the fabric of how you manage your business. As business advisors, we work with clients throughout the year to help them take advantage of current tax laws, avoid costly surprises, and position themselves for long-term success.
Here are five smart tax planning moves you can make right now—no matter what time of year it is.
1. Review Your Entity Structure
Your business structure—whether you're operating as a sole proprietorship, partnership, LLC, S corporation, or C corporation—has a direct impact on how much you pay in taxes.
For example, S corporations can offer significant savings on self-employment taxes by allowing owners to take a reasonable salary (subject to payroll tax) while receiving the rest of their income as a distribution (not subject to payroll tax). But it’s not one-size-fits-all—switching entities involves compliance requirements and potential costs.
Tip: Revisit your entity structure annually with your CPA—especially if your income has changed significantly.
2. Make Quarterly Estimated Payments
Making estimated tax payments throughout the year helps you stay compliant and avoid interest and penalties from the IRS.
Small business owners who don’t have taxes withheld through payroll must pay estimated taxes on income, self-employment tax, and, in some states, franchise or excise taxes. Failing to make timely payments can result in underpayment penalties—even if you pay in full by year-end.
Tip: Use your prior-year tax liability as a baseline, and adjust quarterly if your income increases or decreases. A CAAS advisor or CPA can help you build these into your cash flow forecast.
Setting up and contributing to a retirement plan not only builds your future—it can also significantly reduce your current tax burden.
Depending on your business structure and number of employees, common options include:
Tip: Retirement planning should be discussed midyear to allow time for implementation and cash flow adjustments.
4. Track and Deduct Business Expenses Accurately
You can’t deduct what you don’t document. Proper tracking of deductible business expenses ensures you don’t leave money on the table—and protects you in the event of an audit.
Common deductions include:
Tip: Integrate a cloud-based accounting system with your bank and credit card accounts. Automating categorization and attaching digital receipts reduces errors and saves time at year-end.
5. Monitor the Section 199A Qualified Business Income (QBI) Deduction
The Section 199A deduction allows eligible business owners to deduct up to 20% of their qualified business income(QBI) from pass-through entities like LLCs, partnerships, and S corps.
But qualification isn’t guaranteed. Your total income, business type, W-2 wages, and qualified property can all impact your eligibility. Certain service-based businesses, like legal or accounting firms, are subject to additional limitations.
Tip: Talk to your tax advisor throughout the year to stay within the qualifying limits and maximize this deduction.
Year-Round Planning = Year-Round Savings
Here's the bottom line: when you approach tax planning as a proactive, ongoing process—not a one-time event—you create opportunities for savings, smoother cash flow, and strategic growth.
For more year-round tax planning tips, check out our "Beyond April 15th" Tax Planning Guide. If you have questions about implementing these strategies for your business, leave a comment below or feel free to reach out to me directly. I’m happy to help!