The sun is setting on 2024 and telling Freelancers and all business owners that it’s time to close out the waning year and prepare to welcome the New Year. To make sure that no important matter gets lost in the shuffle during what may be a rush to tie up loose ends, you may appreciate the practicality of a year-end checklist. The checklist is simply a to-do list that keeps you organized as you attend to the many tasks and responsibilities, business and personal, that arise at this time of year. Taxes and other financial responsibilities rank high on the checklist; identifying business (and personal) goals for the New Year run a close second. As you work your way through your checklist, you’ll discover a perhaps unexpected bonus—the checklist also provides an objective assessment of where your business stands as of December 31 and can indicate useful goals and benchmarks for 2025.

Before you become immersed in holiday preparations and celebrations, block out four to eight hours to devote to getting your entity’s house in order. That’s your strategy to eliminate holiday spoilers, like anxiety resulting from uncompleted responsibilities. Call on your discipline and power through the administrative tasks listed below, so you can truly enjoy dropping into parties and celebrating the season with friends, family and colleagues.

1. Make business purchases. The end of the calendar year is your cue to buy equipment, services, or other necessities for your business on or before December 31, to add to your 2024 tax deductions and lower business taxable income. What expenditures are on your wish list and what does your budget allow? If you’ve had business goals on your mind (and I know that you have!), certain software-as-a-service subscriptions could be on your must-have list. Or maybe you’ve thought of updating business equipment, or items to make your workspace more favorable? Do you need to pay an insurance premium, or upgrade a policy? Maybe you can make an early payment and let the expense be recorded as an asset on your 2025 Balance Sheet. Think also about initiating professional services, for example, a business attorney, or even bringing in a Freelancer to help with projects such as bookkeeping or social media management? Now is a great time to make those purchases, which will result in lowering your taxable income.
2. Send Form 1099 to your Freelance workers. First, verify that Freelance team members you’ve hired have completed IRS Form W9, so that you will be ready to send to those who provided services of $600 or more an IRS Form 1099NEC . Tax statements must arrive, by USPS or email, no later than January 31, 2025, as required by IRS regulations.
3. Get your bookkeeping up to date and schedule tax appointments. Before the holidays dominate your focus, bring your books up to date. If you maintain the business financial records yourself, get busy now and review the year’s financial records, receipts and accounting so that documents are organized and closed out for the end of the year and ready for tax preparation time. If you’ll hire a bookkeeper or a tax accountant to handle business taxes, schedule an appointment today to ensure that you’ll 1.) get on the calendar of whom you want to see and 2.) improve your chances of getting an appointment date that’s good for you.
4. Consider your business legal entity and tax election changes. As a business grows and evolves, it may be beneficial to change your business entity classification or change the tax category. In many cases, forming an LLC or corporation, both of which change the entity’s tax status, can be more complicated when the change occurs mid-year and is sure to complicate that year’s tax returns. Furthermore, changing your tax status (e.g., converting your entity to an S-Corp) is time-sensitive and must be completed before the May 15^th due date in most cases. Year-end is a good time to assess whether or not your current business entity type and tax status election are the best choice for your business. Incidentally, making this decision is ample motivation to upgrade your professional services by bringing on a business attorney and/or business accountant (or a very savvy bookkeeper) because you’ll want the guidance of a certified professional such as a CPA, financial planner, or attorney and to help you plan any major changes to have them effective for the start of the new year.
5. Add dates for taxes, registrations and important filings to your new calendar. What with quarterly taxes, business registration or certificate renewals and other important records filings required of a business, you absolutely want to be ready and not caught unawares by any due dates. Record in your new year calendar all important filing, payment and renewal dates so you can keep your business compliant and in legal operation without incurring costly penalties and fees.
   • Business license renewal
   • Estimated income tax payments
   • Sales tax return filings and payments
   • LLC tax payment
   • LLC Statement of Information filing
   • Business insurance premium payments
6. Contribute to your self-employed retirement account Investing money in a self-employed retirement account, such as a solo 401k or SEP-IRA, is 100% tax-free and lets you save on three tax categories that would otherwise pay. Instead, money invested in your self-employed retirement account enables you to avoid the federal and state self-employment tax – and book significant savings! Self-employed professionals can contribute up to 25% of annual net earnings, up to $66,000, to a self-employed retirement account tax-free (for 2023). Make your payment on or before December 31to lower your 2024 taxable income.
7. Cancel any unused memberships and subscriptions. Oh, the best of intentions! You may have signed up for subscriptions, memberships, or other services that renew monthly or annually, which may have been helpful at one point in your business but are no longer useful—or IRT, you found that can’t find a role for them. The end of the year is a great time to review automatic payments charged to your business checking account and verify what is worthwhile and is actively being used.
8. Plan your goals for the New Year. What next big steps to promote business growth do you see? What might be the next strategies you’ll implement to create a sustainable, profitable business? The possibilities are exciting and yours to pursue, guided by a good plan. In the October 15 post, we explored how you might scale your operation—maybe the new year is when you take actionable steps to do that? To avoid feeling overwhelmed, consider dividing your goals into short-term and long-term projects, breaking your larger goals into smaller, actionable steps you will need to plan ahead. Consider also tasks that can possibly be outsourced by hiring a Freelance professional like yourself? Start your new year goal setting by examining the current state of your business and then think about where you would like to be at the end of next year. What actions appear to be needed to get to that point? Next, break those goals into smaller projects and create a plan of smaller goals for each month of next year. When you start the year with smaller, actionable goals that seem easier to reach, it will seem easier to consistently take those smaller steps that can add up to big changes over time. Setting micro goals in advance can motivate you to develop strategies and implement action items that drive achievement.

Happy Thanksgiving to my American readers! To everyone, thanks for reading.

Kim

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