Mid-Year Tax Planning Strategies: How to Set Your Business Up for Year-End Success

Effective tax planning shouldn’t wait until the end of the year. By taking a strategic approach at mid-year, small business owners can significantly reduce tax liabilities, improve cash flow, and prevent last-minute surprises in Q4.

At PSA CPA, we encourage business owners to treat the midpoint of the year as a financial checkpoint—an opportunity to evaluate where you stand and take informed steps that could pay off at year-end.

 Revisit Your Financial Statements

Now is the time to take a detailed look at your year-to-date profit and loss statement, balance sheet, and cash flow report. Are revenues tracking as expected? Have expenses increased in any specific areas? Understanding these trends now allows you to adjust course well before year-end.

Review Estimated Tax Payments

If you’re required to make quarterly estimated tax payments, July is a good time to evaluate whether your payments are aligned with your current income projections. Underpaying could result in penalties; overpaying could unnecessarily restrict cash flow. PSA CPA can help you refine your estimates based on actual performance.

Evaluate Retirement Plan Options

If you haven’t yet established a retirement plan for your business, consider doing so now. Plans such as a SEP IRA, SIMPLE IRA, or solo 401(k) can offer significant tax advantages for both the business and the owner. Setting up a plan mid-year provides ample time to maximize contributions and meet IRS deadlines.

Assess Capital Expenditures

Planning for equipment purchases or capital investments in advance can create opportunities for bonus depreciation or Section 179 deductions. If you anticipate buying qualifying assets before the end of the year, now is the time to map out your purchasing and financing strategy.

Start a Year-End Tax Projection

By creating a tax projection in Q3, you can identify potential liabilities early and act accordingly. Whether it’s accelerating expenses, deferring income, or claiming available credits, proactive planning gives you more control and flexibility. PSA CPA can prepare a custom projection based on your business’s current data and goals.

Check Compliance and Documentation

Use this time to ensure that your payroll records, expense documentation, and vendor files are accurate and complete. Catching errors now—rather than during year-end reconciliations—saves time and reduces the risk of audit-related issues.

Monitor Legislative Updates

Tax laws are constantly evolving at both the federal and state level. Whether it’s changes to business deductions, credit availability, or compliance requirements, staying informed is essential. At PSA CPA, we keep our clients updated on all relevant changes that may affect their tax position or reporting obligations.

Start Preparing Now for a Smoother Year-End

Mid-year is an ideal time to assess your tax position, make adjustments, and begin planning for the months ahead. Thoughtful action now can reduce stress, improve financial outcomes, and ensure you’re in the best possible position come year-end.

If you would like a personalized tax planning consultation or mid-year financial review, reach out to PSA CPA today at contact@psacpa.com. Our experienced team is here to support your business every step of the way.