Most of the planning that matters for a business owner has to be finished while the calendar still allows it. Once the year closes, the options narrow to filing decisions. The five conversations below are the ones worth putting on the calendar with your advisor and CPA in the next several weeks.
01 Manage entity structure and the timing of income and expenses
If you control when the business recognizes revenue and pays expenses, you control which year the tax lands in. Accelerating deductions, deferring a December invoice, funding bonuses, or making a capital purchase all shift the picture, and the right direction depends on whether you expect next year to look better or worse than this one.
This applies to anyone whose income flows through to a personal return, which covers most S corporations, partnerships, and LLCs. It also applies if you are considering a change in entity type, since that election generally has to be made prospectively rather than after the fact.
Ask your CPA to model this year and next side by side before December. A projection built in November is a planning document. The same projection built in March is a receipt.
02 Qualified small business stock
Section 1202 allows shareholders in certain C corporations to exclude a large share of the gain when they sell stock they have held long enough. The requirements are specific: the company has to have been a C corporation, in a qualifying line of business, under an asset threshold when the shares were issued.
Two questions are worth asking now. Do your shares qualify, and can you document it. The second matters as much as the first, because the evidence a buyer or the IRS will want is easier to assemble while the people who were there still work at the company.
Timing matters because the holding period runs from issuance, and because gifts of qualifying shares to family members or non-grantor trusts can multiply the exclusion. Those transfers take weeks to paper correctly.
03 The charitable vehicle, not just the gift
Giving cash at the end of December is the least efficient version of charitable planning. Giving appreciated stock avoids the capital gain. Funding a donor advised fund, a vehicle that takes the deduction now and distributes to charities over time, separates the tax year of the gift from the year the money is granted out.
This is most useful in a year with unusually high income, which for an owner often means a bonus year, a recapitalization, or a sale. Concentrating several years of intended giving into that one year raises the value of the deduction.
The deadline is real. Transfers of privately held interests or illiquid assets need appraisals and charity-side approval, and both take longer in December than the calendar suggests.
04 Using the estate exemption while the value is low
The lifetime exemption is the amount you can transfer during life or at death before federal estate tax applies. Gifts made today use the exemption at today's value, which means moving an interest in a growing business transfers all of the future appreciation outside your estate.
Owners with a business worth substantially more in five years than it is today are the clearest fit, particularly before a sale process begins and the valuation firms up.
Ask what portion of your exemption remains, what a transfer would look like, and how long the work takes. Trust drafting, valuation, and funding realistically run six to twelve weeks, and appraisers are busiest in the fourth quarter.
05 Planning ahead of a liquidity event
Almost every meaningful pre-sale strategy has to be in place before a letter of intent is signed. After that point, transfers and charitable structures are harder to defend, and in some cases the gain is already considered assigned to you.
Two items sit inside this conversation. How the deal is structured, since an asset sale and a stock sale produce different tax outcomes for you and for the buyer. And where you are a resident when the gain is recognized, since state treatment of that income varies widely and a change in domicile takes time and documentation to establish.
If a sale is likely in the next eighteen months, this is the conversation to have first. It shapes the other four.
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None of these are decisions to make alone or quickly. They are questions to put in front of your advisor, your CPA, and your attorney together, so the answers account for the business, the estate plan, and the personal balance sheet at the same time.
Set the meeting for October or early November. The work that follows may need the rest of the year.