As a small business owner, you juggle countless responsibilities—from growing your brand to managing day-to-day operations. But as the end of the year approaches, there’s one more critical task you can’t afford to overlook: year-end tax planning. By avoiding a few common mistakes, you can save money and set yourself up for success when tax season rolls around.

At The Clarity Agency, we specialize in providing bookkeeping services and tax preparation for women entrepreneurs, helping you stay organized and stress-free. Let’s dive into the top five tax mistakes female business owners should avoid before the year ends.

1. Not Maxing Out Retirement Contributions

As a business owner, it’s easy to put off saving for retirement while managing immediate expenses. However, making contributions to a Solo 401(k), SEP IRA, or other retirement accounts can lower your taxable income.

For 2024, the contribution limits are:

• Solo 401(k): $66,000 (including both employee and employer contributions).
• SEP IRA: Up to 25% of your self-employment income, with a cap of $66,000.

Maximizing these contributions before the year ends can help secure your financial future while lowering your tax bill. Not sure how much you can contribute? At The Clarity Agency, our tax preparation services help you optimize every dollar for long-term success.

2. Missing Out on Business Deductions

Many small business owners leave money on the table by not claiming all the deductions they’re entitled to. Common business deductions include:

• Home office expenses
• Marketing and advertising costs
• Equipment and supplies
• Business travel and meals

Don’t let disorganized records keep you from saving money. With our bookkeeping services, we make sure every expense is tracked and documented, so you get the maximum deductions possible.

3. Overlooking Tax-Loss Harvesting

If you’ve made investments in stocks or other financial assets, you may benefit from tax-loss harvesting. This strategy involves selling investments that have lost value to offset gains from profitable ones. It can reduce your taxable income and, in some cases, offset up to $3,000 of your ordinary income annually.  In other words, investments that are in the red could be your ticket to a lower tax bill.

If you’re not sure how to incorporate tax-loss harvesting into your strategy, we at The Clarity Agency can guide you through it, ensuring you maximize your savings.

4. Not Adjusting Your Tax Withholding

Major life changes—like getting married, starting a family, or expanding your business—can affect how much tax you owe. Ignoring your withholding could result in a surprise tax bill or missed refunds. Whether it’s adjusting your W-4 or reviewing estimated payments, it’s essential to make sure your taxes reflect your current situation.

At The Clarity Agency, our bookkeeping and tax preparation services help you stay on top of these adjustments, so you’re not caught off guard.

5. Waiting Until the Last Minute to Get Professional Help

Procrastination can cost you when it comes to tax planning. Many deductions and contributions, such as retirement account contributions or charitable donations, have hard deadlines of December 31st. Waiting until January or February means you’ll miss out on these key savings opportunities.

At The Clarity Agency, we help you stay proactive. Our team of experts in tax preparation for female entrepreneurs is here to make sure you meet deadlines and maximize savings, all while keeping your books organized year-round.

Final Thoughts

Don’t let year-end tax planning slip through the cracks. By avoiding these common mistakes, you can reduce your tax burden and set yourself up for financial success in the new year. At The Clarity Agency, we’re dedicated to helping female business owners navigate the complexities of bookkeeping and tax preparation with ease.

Ready to take control of your finances? Contact us for a free consultation, and let’s craft a personalized tax strategy for your business today.

We encourage you to email info@theclarityagency with questions, and if you know of anyone who could use some extra clarity in their finances, be sure to refer them!

By: Sofia Ritz, Social Media Intern