Plan for Tax Before Year-End, Not After

The contractors who get blindsided in April usually had a strong year and never set anything aside for it. A run of profitable jobs raises the bill, but if no one was projecting it, the cash already went back into payroll, materials, and the next mobilization. The moves that actually lower what you owe almost all have to happen before December 31: accelerating an equipment purchase, funding a retirement plan, or timing income across the year-end. Once the year closes, your preparer is mostly reporting what already happened. Planning is what changes the number; tax preparation and filing is what reports it.

For S-corp owners the planning is tighter. Reasonable compensation has to hold up against your distributions, and the split affects payroll tax and what flows through to your return, so it's worth setting deliberately rather than backing into it in February. Equipment timing matters too. The same truck or excavator bought in late December instead of early January can move the deduction by a full tax year, and whether you want it this year or next depends on where your income is landing.

None of this works on stale books. Planning runs on current numbers, so the work starts from a clean, up-to-date general ledger and a real read on the year so far. That's why we keep planning and your monthly books on the same team, and why the projection is something you can actually trust when it's time to act.