The biggest tax mistake most business owners make isn't a calculation error in April. It's a lack of planning in November.
When you treat your accountant as a historian—someone who just files what already happened—you've lost the game before it starts. You're left with a tax bill that's nothing more than a surprise you have to pay.
Proactive tax strategy is different. It's about making smart decisions now, in the final six weeks of the year, to change the outcome.
As a business owner myself, I've lived the stress of year-end. My firm, DP Mende & Co., is built to be the proactive advisor I always wanted. We don't just file your taxes; we build a plan.
Here are the five critical moves every small business owner should be discussing with their CPA right now.
Move 1: The "Can I Buy That Truck?" Move (Strategic Purchases)
This is the question I get most often in Q4. Thanks to Section 179 and Bonus Depreciation, the answer can be a powerful one.
- What it is: In simple terms, these tax rules often allow you to deduct the full purchase price of new or used business equipment (like vehicles, machinery, or computers) in the year you buy it, rather than depreciating it slowly over time.
- Why it matters: If you're having a profitable year, a $50,000 equipment purchase could translate into a $50,000 deduction, significantly lowering your taxable income.
- The Advisor "Gotcha": This is where a real advisor helps.
- "Placed in Service": You must buy and start using the equipment by December 31st. Just paying for it isn't enough.
- Cash Flow vs. Tax: Never spend $50,000 just to save $15,000 in tax. We'll help you run the numbers to ensure the purchase makes sense for your cash flow first, and your tax bill second.
Move 2: The "Timing" Move (Managing Income & Expenses)
As a cash-basis taxpayer, you have one superpower left in 2025: Timing.
- What it is: You have a degree of control over when you receive income and when you pay expenses.
- Why it matters:
- Need to lower income? Accelerate expenses. Pre-pay your January 2026 rent (if your lease allows), buy a year's worth of office supplies, or pay vendor invoices before December 31st.
- Need to increase deductions? You can also defer income. If you're about to send a big invoice, consider sending it on December 20th with "Net 30" terms. Your client will likely pay you in January, moving that income into the 2026 tax year.
- The Advisor "Gotcha": This isn't magic; it's just moving the tax burden from one year to the next. But this "kick the can" strategy can be incredibly powerful if 2025 was an unusually high-income year.
Move 3: The "Pay Yourself First" Move (Funding Your Retirement)
Want to give yourself a massive, tax-deductible bonus? Fund your retirement. This is the #1 move SBOs miss.
- What it is: Setting up and funding a business-owner retirement plan like a SEP IRA or a Solo 401(k).
- Why it matters: This is a true "two-fer." You're not just spending money to get a deduction; you're investing it in your own future. Contributions are generally 100% tax-deductible, which can drastically lower your adjusted gross income.
- The Advisor "Gotcha": There are rules and deadlines. For a Solo 401(k), the plan must be established by December 31st (even if you fund it in 2026). A SEP IRA gives you more flexibility. We can help you choose the right plan and calculate your maximum contribution.
Move 4: The "S-Corp Check-Up" (Reasonable Compensation)
If you're an S-Corp owner, December 1st should be your final check-up.
- What it is: Reviewing your "reasonable compensation" (W-2 salary) versus your owner distributions for the year.
- Why it matters: The IRS requires you to pay yourself a reasonable salary. Paying yourself too little (and taking it all in distributions) is the #1 red flag for an S-Corp audit. On the flip side, paying yourself too much in W-2 salary means you're overpaying on payroll taxes.
- The Advisor "Gotcha": This number isn't a guess. We'll do a final payroll run and a quick analysis to ensure your salary-to-distribution mix is optimized, defensible, and compliant before you close the books.
Move 5: The "No Surprises" Move (The Estimated Tax 'True-Up')
This is the move that ensures you don't get a "surprise" in April.
- What it is: A final projection of your 2025 profit compared to the quarterly estimated tax payments you've already made.
- Why it matters: Had a much better year than you expected? (A great problem!) You may need to make a larger final Q4 payment (due Jan. 15th) to avoid a nasty underpayment penalty.
- The Advisor "Gotcha": This is about precision. Don't send the IRS a massive, interest-free loan by overpaying. Don't get hit with a penalty by underpaying. Let's pull your year-to-date P&L and payment history, and a quick projection will tell us exactly what to do.
Stop Guessing. Start Planning.
These five moves are just the beginning. The real magic happens when they are part of a comprehensive plan.
Stop trying to piece together a tax strategy from blog posts. You are an expert in your business. Let us be the expert in this.
We have six weeks left in 2025. Let's use them to build a real, proactive plan that gives you clarity and confidence.
Don't walk into 2026 blind. Schedule a consultation with DP Mende & Company today.