2023 Tax Planning Fundamentals

Tips for Brokers and Their Small Business Owner Clients

By John Hassett

Planning for the new year includes reviewing your tax situation so you don’t miss opportunities to save money. Given that the average American spends more on taxes than any other category, good tax planning can make a huge difference. Entire books are written on this subject which can make the process overwhelming. Here are some basic steps that can lead to effective tax planning:  

Step 1:  Get your books in order

Accounting may be one of the more tedious jobs on the planet so it should be no surprise that people tend to procrastinate keeping up on all the bookkeeping. Unfortunately, accounting is the foundation of good tax planning. If you do not know where you are, it is hard to project where you will end the year in 2023.

  • Make sure you have your bank and credit card accounts reconciled
  • Review your balance sheet to see if there are items that need to be updated
  • Review expenses paid from personal accounts to see if any business expenses were accidently paid from a non-business account   

Step 2:  Project your income

Come September it is time to reconcile your bank accounts so you can make an educated guess at where you will end the year.

  • Run a year-to-date profit and loss in September
  • Add forecast of revenue and expenses for the remaining part of the year
  • Forecast non-business income and deductions

Step 3:  Make an Appointment with your tax advisor

Ideally, this should be done early enough so you have time to make changes. If you want to change your tax advisor it is best to do this early in the year. Work through an initial intro process and then by October or early November you can make changes that will have an impact on 2023 taxes.

  • Send your numbers over prior to the meeting
  • Include a couple of notes of items you want to discuss

Step 4:  What to cover in your meeting 

Often, a good year in business leads to a bad year of taxes and a difficult year of business can end up being good news when it comes to taxes. There are ways to save money in all scenarios.  Here are some of the most common tools:

  • Retirement 401K, ROTH: 
  • Ask if you have the best plan in place for your business?
  • Review the tax impact of contributions 
  • Consider if there is an effective way to incorporate a ROTH as part of your retirement portfolio. 
  • Charitable Contributions
  • Consider making qualified charitable contributions directly from your IRA
  • Accelerate or Defer gifting based on the tax impact
  • Donor Advisor Funds can be a powerful way to balance your gifting amounts
  • Investment
  • Ask your financial advisor for a projection of interest, dividends, and capital gains
  • Ask your tax preparer if you have loss carryforwards – if yes, how much?
  • In most circumstances, taxes should not drive investment decisions, but they should always be part of the buy/sell decision process
  • Capital purchases of business equipment
  • Should you make your capital purchases this year or next?
  • Vehicles – Should you buy or lease?    
  • Bonus depreciation – sometimes it is smart to elect out of bonus depreciation and save deductions for later years.  If the vehicle is over 6,000 pounds (look for GVWR over 6,000), it qualifies for bonus depreciation.

Don’t delay – most decisions that impact tax savings need to be made well before the end of the year. Nothing is more painful than telling a client they could have saved taxes with simply adjustments to decisions they already made.  

If you feel like it is too late…

Well, let’s make sure it doesn’t happen again. Most businesses find Step 1 to be the Achilles heel. There are a lot of good self-help resources available. If you are too busy, consider outsourcing the job. There are many good accountants out there that help their clients maintain their books during the year. 

If you do not know where to start, give us a call. Malley & Hassett, LLP specializes in helping small businesses year-round.  

John Hassett is a certified public accountant and the managing partner of Malley & Hassett, LLP. He has over 25 years working with businesses on accounting, internal controls, tax planning, and tax compliance.  



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