October is the New April: Smart Tax Moves Small Businesses Should Make

Waiting until December is often too late. Here's what you should do in October to lock in deductions, reduce your taxable income, and set your business up for a stress-free year-end.

1. Review Your Year-to-Date Financials

Start by running your profit & loss statement and balance sheet. These reports will help you:

• Estimate taxable income

• Spot unusually high profits (which may trigger a higher tax bill)

• Catch errors or uncategorized expenses

Use this data to plan your next moves.

2. Accelerate Business Expenses (If Income Is High)

If you’re heading for a high-income year, consider pulling some expenses forward into this calendar year. Think:

• Office equipment or software

• Marketing costs

• Prepaying for rent, insurance, or subscriptions

Many of these expenses are fully deductible, and if made before December 31, they count toward this year’s tax return.

Tip: Assets like computers or machinery may qualify for Section 179 or bonus depreciation — meaning you can deduct the full cost upfront.

3. Review Payroll and Owner Compensation

If you’re an S corp, make sure you’re paying yourself a reasonable salary — this is key to staying compliant and optimizing your tax strategy.

Also consider:

• End-of-year bonuses

• Additional payroll runs

• Payroll tax obligations for Q4

  
  

4. Maximize Retirement Contributions

October is an ideal time to calculate your potential contributions to:

• Solo 401(k)

• SEP IRA

• SIMPLE IRA

These accounts can significantly reduce your taxable income, and if you’re self-employed, the deadlines and limits vary — so getting ahead now matters.

Reminder: Solo 401(k) accounts must be established by December 31, even if you contribute later.

5. Run Tax Projections with Abram Rice Financial

This is the month to schedule a tax planning meeting with your CPA. They’ll help you:

• Estimate your year-end tax bill

• Adjust your Q4 estimated tax payment

• Identify any last-minute deductions or credits

Avoid surprises in April by planning in October.

6. Use Health Plans to Cut Taxes

Health-related strategies are often overlooked. Explore:

• Contributing to a Health Savings Account (HSA)

• Using a Flexible Spending Account (FSA)

• Setting up a QSEHRA or ICHRA to reimburse employees for insurance costs

These strategies can lower your taxable income while also offering health coverage benefits.

7. Organize Records and Receipts

Good records = lower stress + better deductions.Make sure you’ve documented:

• Mileage and travel

• Home office use

• Major purchases

• Recurring business expenses

Consider scanning receipts and organizing them by category or vendor.

8. Evaluate Your Business Entity Type

If you’re currently a sole proprietor or LLC, October is a smart time to talk to your CPA about:

• Electing S corp status for next year

• Setting up a formal structure to optimize taxes and protect liability

Entity structure impacts how much you pay in self-employment tax, so don’t overlook this.

9. Look for Available Tax Credits

October is your chance to research and apply for:

• R&D Tax Credits (even for software or process improvement)

• Work Opportunity Tax Credit

• Energy-efficient upgrade credits

• Employee retention credits (for certain situations)

These credits can directly reduce your tax bill, not just your taxable income.

10. Schedule a Tax Planning Meeting Now

If there’s one move you shouldn’t skip this October, it’s meeting with your tax advisor or CPA. They’ll help you make sense of all these strategies — and ensure you’re not leaving money on the table.