November 12, 2024
A year-end tax planning checklist for Colorado small businesses
The best tax moves have a deadline of December 31, not April 15. Here is the year-end checklist we run with Front Range business owners before the window closes.
Here is the thing most owners learn the hard way: by the time you are filing in April, almost every move that could have lowered the bill is already off the table. Real tax planning happens before December 31, while you can still change the outcome. So every fall, we run a version of this checklist with clients. Here is the short tour.
Get your books current first
None of this works on guesses. Before you can plan, your books need to be current and accurate through the year so far, so you actually know your profit. If you are behind, that is step zero — and worth doing now rather than discovering the gap in April. (If the backlog is real, our guide to catch-up bookkeeping is the place to start.)
Project the year and the tax
With current books, estimate where the year will land and what you are likely to owe. That single number drives everything else — whether it makes sense to defer income, accelerate expenses, top up retirement, or just make sure your final estimated payment is right. Planning without it is guessing.
The classic year-end levers
- Time income and expenses. If you can push some income into January or pull deductible expenses into December, you may shift tax between years — useful when your rate differs year to year.
- Equipment and Section 179 / bonus depreciation. A needed equipment or vehicle purchase placed in service by year-end may be deductible now rather than over years — but buy it because you need it, not just for the deduction.
- Retirement contributions. Funding a SEP-IRA, solo 401(k), or other plan can be one of the largest legitimate deductions available to an owner — and some plans must be established by year-end even if funded later.
- Health and other benefit accounts. Make sure you have captured the deductions available for health insurance, HSAs, and similar.
- Clean up the books. Write off truly bad debts, record any owner items correctly, and make sure everything that should be captured is.
The Colorado and entity angles
A few state-specific items belong on the fall list too. If you own a profitable S-corp or partnership, check whether the Colorado PTE election (the SALT Parity workaround) makes sense for the year — it is deadline-sensitive. Confirm your S-corp salary was reasonable and actually run through payroll. And make sure your final quarterly estimate, both federal and Colorado, is set up so you are inside the safe harbor.
Tax planning is a fall sport. The difference between a return you dread and one that is just paperwork is almost always decisions made in November and December, not April.
Set up next year while you are at it
The last item on the checklist is forward-looking: use what you just learned to set next year up better — cleaner books, a tax account that funds itself from each deposit, and a quarterly plan so you are never surprised. Year-end is as much about not repeating this scramble as it is about this year’s bill.
The bottom line
The highest-value tax work has a December 31 deadline, not an April one. Get your books current, project the year, pull the right levers, and check the Colorado-specific items before the window closes. If you want a second set of eyes on your year-end while there is still time to act, that is exactly what a fall planning call is for.
This is general information for Colorado business owners, not individual tax advice, and the specifics change year to year. Confirm the current rules and what applies to you with a CPA before acting.