5 Questions to Ask Your CPA Before Year End
Last weekend I met with a client for his Q3 review. We walked through his numbers, talked about where the year was heading, and looked at what was working.
Near the end he asked, "What should I be doing before year end?"
It's a good question. It's also not mine to answer.
He works with a tax strategist, and year end tax decisions belong with that person. My job is different. I make sure the numbers in front of them are current and correct, so the advice they give is based on what's actually happening in the business.
So instead of guessing, I sent him off with five questions to bring to that conversation. If you own a small business, they're worth asking too.
1. Should we move expenses into 2026?
Sometimes it makes sense to pay for things this year instead of next. Sometimes it doesn't.
The answer depends on how profitable this year has been, what you expect next year to look like, and whether your books are kept on a cash or accrual basis. A strong year might be a reason to spend before December 31. A slower year might be a reason to wait. Your CPA can tell you which fits your situation.
2. Would buying equipment before December 31 lower our 2026 taxes?
If you've been planning a large purchase, timing matters. Ask about bonus depreciation, Section 179, and how your state treats them. State rules don't always match federal rules.
One detail worth asking about: for most of these deductions, the equipment generally has to be placed in service by December 31, not just ordered. That means delivered, set up, and ready to use.
3. Can we start or increase retirement contributions for 2026?
Retirement contributions can lower your taxable income while building your savings. A SEP IRA, a Solo 401(k), and other plans each have different contribution limits, rules, and setup deadlines.
Some plans need to be in place before year end. Ask which one fits your business and when it needs to be set up.
4. Should we review owner pay or distributions?
This matters most for S corps and other pass-through entities.
How you pay yourself affects your taxes. S corp owners who work in the business generally need to pay themselves a reasonable salary. The balance between salary and distributions is worth reviewing every year, and year end is a good time to do it.
5. Are there deductions or credits we're missing?
Ask about the qualified business income (QBI) deduction, research and development provisions, and employer tax credits.
Not every business qualifies. But it's worth asking, especially if your business grew or changed this year.
Why timing matters
Most owners don't ask these questions until April. By then the year is closed. Your CPA can tell you what happened, but they can't help you change it.
In October and November, there's still time to act.
Where your books fit in
Your CPA can only plan with the numbers they have. If your books are three months behind in December, they're planning with September.
Before your year end conversation, it helps to have:
Books reconciled through the most recent month
A rough estimate of revenue and expenses for the rest of the year
A list of purchases you're considering
This is where a bookkeeper comes in. When your books are current, your CPA spends their time on planning instead of catching up.
Your next step
If you have a CPA, send them this list this month.
If your books aren't current, reach out to a bookkeeper sooner rather than later. If you'd like help getting your books ready before year end, book a discovery call.
This post is for general information only and is not tax advice. Talk with your CPA or tax advisor about your specific situation.