While tax season may seem months away, year-end planning begins long before the calendar turns to January. The final months of the year provide tax professionals with valuable opportunities to help clients reduce tax liability, prepare for upcoming filing requirements, and make informed financial decisions before December 31.

Here are several areas to review with clients before year-end.

1.      Review Income and Deductions

Depending on the client’s circumstances, consider discussing:

  • Accelerating or deferring income
  • Timing deductible business expenses
  • Charitable contributions
  • Estimated tax payments
  • Retirement plan contributions
  • Health Savings Account (HSA) contributions

Even small adjustments made before year-end can have a meaningful impact on a client’s tax outcome.

2.      Evaluate Capital Gains and Losses

Clients with investment activity should review their portfolios before year-end.

Tax-loss harvesting may help offset capital gains, while clients anticipating unusually high income may benefit from evaluating the timing of asset sales.

Review carryforward losses from prior years and discuss whether realizing gains before year-end aligns with the client’s overall tax strategy.

3.      Review Required Minimum Distributions (RMDs)

For clients subject to RMDs, confirm that distributions are completed before the applicable deadline. Missing an RMD can result in unnecessary penalties and additional administrative work.

This is also a good opportunity to discuss Qualified Charitable Distributions (QCDs) for eligible clients who intend to make charitable gifts.

4.      Retirement Contributions

Many retirement contribution deadlines extend into the following year, but planning should begin now.

Review opportunities involving:

  • Traditional IRAs
  • Roth IRAs
  • SEP IRAs
  • SIMPLE IRAs
  • Solo 401(k) plans
  • Employer-sponsored retirement plans

Business owners may have additional opportunities to increase retirement savings while reducing taxable income.

5.      Review Business Purchases and Depreciation Opportunities

Business clients considering equipment purchases should evaluate whether completing those purchases before year-end supports their tax planning objectives.

Review potential implications related to:

  • Section 179 expensing
  • Bonus depreciation
  • Business asset purchases
  • Vehicle acquisitions

Timing purchases appropriately may improve current-year deductions while supporting future business growth.

6.      Verify Estimated Tax Payments

Year-end is an excellent time to determine whether clients have made sufficient estimated tax payments.

This review is especially important for:

  • Self-employed taxpayers
  • Gig economy workers
  • Investors
  • Clients with significant non-wage income
  • Business owners

Addressing potential underpayment issues before filing season helps reduce surprises and may minimize penalties.

7.      Confirm Entity and Filing Elections

Business clients should review whether their current entity structure continues to support their long-term goals.

Year-end discussions may include:

  • S corporation elections
  • Partnership considerations
  • Entity restructuring
  • Business succession planning
  • Compensation planning for owner-employees

Although some elections have specific filing deadlines, planning conversations should begin well before those deadlines arrive.

8.      Prepare Clients for Filing Season

The months before filing season are also an ideal time to encourage clients to organize tax documents.

Remind clients to:

  • Gather income documents.
  • Organize expense records.
  • Reconcile bookkeeping.
  • Update personal information.
  • Report life changes that could affect their tax return.

Early preparation often leads to a smoother filing experience for both the client and the tax professional.

Year-end planning is about more than reducing taxes. It provides an opportunity to demonstrate value beyond tax return preparation.

Reaching out before year-end allows you to:

  • Identify planning opportunities
  • Reduce filing season surprises
  • Improve efficiency
  • Build stronger client relationships
  • Consider yourself as trusted advisors

Clients may expect year-round guidance and not just tax preparation once a year. Proactive planning conversations help meet those expectations while creating opportunities for deeper advisory services.

Start the Conversation Today

The best year-end tax planning strategies begin before the holiday season. By reaching out early, reviewing each client’s unique circumstances, and identifying planning opportunities before December 31, tax professionals can help clients make informed decisions while setting the stage for a more efficient filing season.

Do you have tax software that can help you be more proactive? Consider signing up for a free trial of TaxAct Professional today.

 

Disclaimer: This article is for informational purposes only and not legal or financial advice. TaxAct Professional free Evaluation Edition does not include the ability to file returns with the IRS, nor does it include Enterprise features such as cloud storage or multiple users. Professionals are able to utilize the Evaluation Edition to determine whether or not they wish to purchase the full product for TY26.