Your Year-End Checklist

Can you believe it’s already the end of the year? Now is the time to celebrate with friends and family, reflect on the past 12 months, and plan for the new year. To help you out, Brian created a checklist you can use to review 2022 and start 2023 with a clean state. The checklist includes business and personal to-do items as well as links to resources sure to help you out.

Business Checklist

1. Review your goals.

The end of the year is the perfect time to review the goals you made at the beginning of 2022 and set new ones for 2023. Ask yourself:

• How did I do this year?
• What did I accomplish that I’m proud of?
• What could I have done better?

2. Update your cash flow.

If you’re using the Profit First system, look at your buckets and see if one looks too full or too sparse, then adjust your allocations accordingly. Remember to not make any adjustments of more than 3% per quarter.

3. Review your profit and loss.

At this point in the year, you should have a good sense of your gross business income. If you have a little extra profit this year, look at ways to shelter some of that income so you’re not paying unnecessary income or self-employment tax.

4. Find your tax return.

December may seem a little early to think about taxes, but while you have some downtime, it can be worthwhile to organize and prepare for tax season. Finding your tax return will also help you out in your year-end review.

5. Max out your retirement savings.

If you’re a business owner and need to shelter some profit, retirement accounts like a Solo 401(k) or SEP IRA are great resources.

6. Defer income and incur expenses.

The end-of-the-year is an excellent time to defer income until 2023 or incur business expenses that you know you’ll have at the beginning of next year. This is an easy way to reduce your tax liability as long as the expenses are ordinary, helpful, and necessary.

7. Consider out-of-the-box expenses.

When considering expenses, don’t forget some out-of-the-box expenses, such as employee benefits, cell phone reimbursement, educational assistance, or dependent care assistance. You can also expense up to $25 per client for gifts as well as expenses for a holiday party for your staff.

8. Update your asset list.

Did you buy new assets in 2022? Review your list of assets associated with your business and make sure it’s up-to-date before the new year. You can also consider what equipment you no longer need and what you can acquire if you’re looking to reduce your bottom line.

9. Review your business structure.

When you evaluate your business structure and qualified business income (QBI) deduction, don’t forget to consider setting up a Solo 401(k) before the deadline of December 31.

10. Don’t forget pandemic programs.

We’re coming to the end of the government pandemic benefits for 2020 and 2021, so don’t forget to review whether you can receive any benefits from programs like the PPP and ERC.

Personal Checklist

1. Review your goals.

Review where you succeeded and where you fell short. Use that information to decide what changes you can make in 2023.

2. Update your budget.

The end of the year gives you a solid endpoint to assess whether you matched the goal you set at the outset of 2022. It’s also a great time to create a budget that finally works.

3. Create a holiday spending bucket.

Consider how much you want to spend this holiday season. Create a separate bucket just for the holidays and stop spending when the money's gone. You'll thank yourself when January comes and you don’t have a huge credit card bill.

4. Spend the benefits you’ll lose.

Whether it’s vacation days, a medical flexible spending account, or a dependent care flexible spending account, some workplace benefits don’t roll over to 2023. Take stock of your remaining benefits and use them to your advantage before January 1.

5. Make charitable contributions.

December 31 is the last day your donations can go on your 2022 tax return. If giving to charity is part of your spending plan, ask yourself these questions to make the most of your charitable giving.

6. Pump up your 529.

The tax deductions for your 529 will have to be made by December 31 for this tax year. Your state may be one of 30 that allows you to deduct your contributions.

7. Max out your 401(k).

If your spouse is a W-2 employee, they have until December 31 to contribute to a 401(k) plan for this tax year. However, they have until April to make contributions to a traditional IRA, Roth IRA, and HSA.

8. Find your tax return.

Tax season is just around the corner. Preparing now can save you mental energy in 2023. You can also review your tax return to assess whether something like a Roth conversion makes sense for you.

9. Review your will and trust.

At the end of the year, you’re likely to reflect on the year and all of the changes that have happened. Now is a great time to make sure your estate plan reflects those changes and that your needs match your current situation.

10. Review your insurance documents.

Your insurance documents should cover your current life situation. Review the following policies to make sure they meet your needs:

• Life insurance
• Disability insurance
• Renters or homeowners insurance
• Health insurance

Resources + Links

• “How To Get Control Of Your Spending Without Tracking Every Penny,” Forbes
• “How To Make The Most Out Of Your Charitable Giving,” Forbes
• “How Much is you State’s 529 Tax Deduction Really Worth?” Saving For College
• Being Profit First with Mike Michalowicz
• Your 2022 Mid-Year Review
• Brian’s Social Media: Twitter, Instagram, Facebook

About Brian and the Mission Driven Business Podcast 

Brian Thompson, JD/CFP, is a tax attorney and certified financial planner who specializes in providing comprehensive financial planning to LGBTQ+ entrepreneurs who run mission-driven businesses. The Mission Driven Business podcast was born out of his passion for helping social entrepreneurs create businesses with purpose and profit.

On the podcast, Brian talks with diverse entrepreneurs and the people who support them. Listeners hear stories of experiences, strength, and hope and get practical advice to help them build businesses that might just change the world, too.