Decoder TaxResource Library
Decoder Monthly

December: Year-End Wrap-Up

Review key tax and business tasks to keep on your radar in December and prepare your business and tax records for the year ahead.

During this month, focus on reviewing your organizational structure, evaluating strategic partnerships, and finalizing tax and financial strategies. This will ensure you end the year on a strong note and are well-prepared for the next year. Key Takeaways: -Review Organizational Structure: Assess whether new entities or changes are needed for the upcoming year. Consider switching to an S Corp and ensure your entity structures meet operational needs. -Evaluate Strategic Partnerships: Review partnerships with suppliers, mentors, and associates. Rate their performance based on efficiency, cost, responsiveness, and reliability to decide which relationships to cultivate or replace. -Year-End Spending: Take advantage of year-end sales to buy business assets or spend on operations such as advertising, office supplies, and machinery. Make necessary last-minute purchases to optimize tax deductions. -Portfolio Rebalancing: Engage in tax harvesting by offsetting capital gains with tax losses and reinvesting in profitable areas for long-term gains. -Financial Statements and Tax Returns: Understand how financial statements correlate with tax returns, particularly the difference between distributions and taxable income. Implement the empowerment wheel to continually set and achieve new goals. Bonus Takeaways: 1. Smart Ways to Plan: Be aware of the tax environment, have strategic partners, and understand how taxes affect your business. 2. Use Common Sense: Avoid poor advice from uninformed sources and ensure your tax preparer is familiar with your business. 3. Act Like a Business Owner: Take responsibility and approach your business with the mindset of a professional owner.