Year-End Checklist for Business Owners- with at least one ‘must do!’
Don’t get bogged down by eggnog and gift shopping for Aunt Edna this holiday season and forget to take these super important financial planning steps for your business. Come January, you will thank me for these reminders!!
Here’s a checklist to ensure your business is financially prepared and primed for prosperity for the upcoming year. Cheers! Stacy (Head’s up…here comes your MUST DO…)
1) File your BOI Report to Stay Compliant with the Corporate Transparency Act (MUST DO!) UPDATE: Supreme Court Postpones effective date of compliance as of 12/4/24. No longer due on 1/1/2025. Stay tuned for more guidance.
“Make sure I filed what with whom?” Yeah, it’s a new law (thanks, Congress) and it’s super important that you file this report before January 1st, 2025. If you don’t file, consequences may include hefty penalties and fines.
The Corporate Transparency Act now requires that all corporations (including single owner LLCs) to file a “Beneficial Ownership Information Report” with the Financial Crimes Enforcement Network (FinCEN). A "beneficial owner" is any individual who directly or indirectly (1) owns or controls 25% or more of an ownership interest in a company or (2) exercises substantial control over the company. FinCEN stores this information in a secure, non-public database.
Who has to report? While there are some exemptions, if you filed your business with the Secretary of State, there is a good chance you are required to file.
What Information Must Be Reported?
The report must include:
Business Name and Assumed Business Name
Business Address
Employer Identification Number (EIN), Social Security Number, or some other identifying number
Beneficial Owner information: - Full legal name of the beneficial owner(s) - Date of Birth - Current Address - Unique identifying number (e.g., passport or driver’s license number) and a scanned copy of the document with the unique identifying number
What’s the deadline to file? NOTE: No longer Jan 1, 2025. Enforcement is postponed while law is fought in courts. Stay tuned for more guidance.
Businesses formed prior to January 1, 2024, must file before January 1, 2025. Businesses formed on or after January 1, 2024, but before January 1, 2025, are required to file within 90 calendar days of the business’s formation. Important note: if any of the information in the report changes, you have 30 days to update the information in a new BOIR.
Need even more info? The US Chamber of Commerce put together this guide.
2) Tax Planning for the Month of December
December is the last month of the tax year, so now is your last chance to take advantage of some common strategies to help reduce your annual net income and tax bill come April. I call this the Pull-Push strategy and it works best for businesses that report their books on a cash basis.
The first part of the Pull-Push strategy is to “pull forward” any expenses that you can fully or partially deduct from your income in 2024. Think about the big ticket items that you’ve been on the fence about buying, like a new computer or piece of equipment. If your cash flow or credit availability supports it, make that purchase in December instead of in the new tax year.
“The first part of the Pull-Push strategy is to “pull forward” any expenses that you can fully or partially deduct from your income in 2024.
The second part of the Pull-Push strategy is to “push out” revenue that you can afford not to receive until the new year.”
The second part of the Pull-Push strategy is to “push out” revenue that you can afford not to receive until the new year. Delay sending that invoice if possible (however, be careful the delay won’t annoy your customer or client who may be trying to “pull forward” expenses!)
Finally, if there is a charity or non-profit that your business loves to support, make sure to get those gifts done before year end!
3) Get your data organized and reconciled
Tax preparation is just around the corner and your life will be MUCH easier if you take some time now to clean up your books by categorizing expenses and reconciling your bank statements through at least November.
If you claim the home office deduction, start to collect the data you will need to provide your accountant or tax prep software. Remember, with the square footage method, where you deduct a % of total home expenses based on the square footage of the home used exclusively for the business, you can deduct a portion of all home maintenance and improvement costs. Make a list of any projects that might qualify and keep your receipts handy.
4) Review your 2024 expenditures and start a draft budget for 2025
The best place to start when estimating costs for the upcoming year is last year’s number. Then think about how that figure might change based on pricing increases due to inflation, or based on usage increases based on changes to your behavior. For example, if you doubled the size of your office space since last year, your electricity bill might also go up 100%.
Don’t forget about costs that come once a year instead of monthly, like your state incorporation renewal, licensing fees, etc. Convert that total into a monthly number so you have a better sense of what your true costs are each month.
5) Plan Your 2025 Travel Now
If you travel occasionally for work, try to make plans as early as possible. This allows you to watch ticket prices for flights which can dramatically change month to month. Time is money in this sense that you can save a lot if you give yourself enough time to shop and then pounce on the deals.
If you travel a lot for work, take a look at credit card offers that may give you big bonuses for signing up. Many frequent business travelers get great perks with car rentals and hotel stays from their credit cards.
6) Share your Gratitude with Clients, Vendors & Friends of your business
No man (or woman) business owner is an island.
Most people remember to thank their hard-working employers this time of year, but the holidays are a great time to share a note of special thanks to the less visible people who contribute to your success, whether it be the people who directly pay your bills like your clients and customers, or the service providers who help you get everything done, like your accountant, banker, bookkeeper and more.
Maybe you have a supplier who always delivers on time, or maybe you have a contact in the community who is always saying your name in rooms you aren’t in…now is a great time to give them a hand-written card of thanks or a small gift card. It doesn’t have to be an expensive gift basket— just a note of thanks goes a long way and will keep those relationships strong in the future.
Did you find this list helpful? Make sure you’re subscribed to my newsletter and share with a business owner friend!
Full Disclosure: Nothing on this website should ever be considered to be investment or tax advice, research or an invitation to buy or sell any securities. Please see the Disclaimer page for a full disclaimer.
Stacy Dervin, CFA, CFP® provides fee-only financial planning and investment management services in Eugene, Oregon. Tailored Financial Planning (TFP) serves clients as a fiduciary and never earns a commission of any kind. As a financial advisor, Stacy is on a mission to help Gen X and Gen Y be truly proactive about their financial futures.
