It’s hard to believe that 2023 is almost over. Before the New Year, it’s time to reflect on the past year and get ready for the next one. On this special episode, Brian lists off 10 business and 10 personal tasks that you should check off your list to end 2023 on the right note and start 2024 with a clean slate.

Episode Highlights

10 End-Of-Year Business Action Items

1. Review your goals

How did you do this year? What were you proud to accomplish? Anything you wish you could have done better? The end of the year is a great time to review the goals you made at the beginning of the year and set new ones for 2024.

2. Update your cash flow

If you use Profit First, look at each bucket’s allocations. If a bucket looks too full or scarce, update your percentages accordingly. Remember: Do not make adjustments of more than 3%, which can put you in a bind later.

3. Review your profit & loss

At this point in the year, you should have a good sense of your business’s gross income, which makes it an ideal time to review your profit & loss statement. Hopefully, it was a banner year for you!

4. Find your tax return

There’s nothing like some downtime during the holidays to organize and prepare for tax season. Take some time to find a return to help with some of the next tasks on this list.

5. Max out your Solo 401(k) or SEP IRA

If you have a little extra profit this year, retirement accounts are a great way to shelter income.

If you have a Solo 401(k), you can contribute $22,500 as an employee in 2023. Additionally, if you are age 50 or older, you can contribute $7,500 in employee catch-up contributions and up to $66,000 in employer contributions.

If you have a SEP IRA, you can contribute up to 25% of your adjusted net earnings or $66,000 in 2023, whichever is less. 

6. Defer income and incur expenses

It’s an excellent time to defer income until 2024 and incur expenses you know you’ll have at the beginning of the year while it’s still 2023. However, remember two things before you take this approach:

• The business expense must be ordinary and necessary, meaning it’s an expense that a business like yours would incur.

• You don’t save money on an expense you wouldn’t otherwise buy.

7. Consider “out-of-the-box” expenses

When thinking about expenses, consider some that may be “out-of-the-box,” such as employee cell phone reimbursement, educational assistance, or dependent care assistance. Expenses can also include up to $25 per person gifts for clients or holiday parties and some forms of holiday travel if they include business reasons.

8. Update your asset list

Did you buy new assets during the year that will affect your tax return? It’s important to have an accurate list of assets associated with your business for tax purposes. Also, figure out what equipment you no longer use in the business and consider what equipment you can acquire if you’re trying to reduce your bottom line.

9. Review your business structure

Evaluate your business structure and the qualified business income deduction for any changes that you need to make, such as setting up a Solo 401(k) by the deadline of December 31.

10. Reflect before 2024

How do you feel about your business? Is it going in the direction you want? How can you bring more intention to what you’re doing? Reflecting on the past year and creating some attention for the new year is essential.

10 End-of-Year Personal Action Items

1. Review your goals

Just like you did with your business, review your goals for 2023 and take stock of where you succeeded and where you fell short. Either way, you’ll have some good information about the changes you can make in 2024.

2. Update your budget

Your money and your business are tools to live the life that you want, and the end of the year gives you a solid endpoint to assess whether you matched the goals you set at the outset of 2023. If you didn’t set financial goals for 2023, the start of the new year is a great time to use a budget that finally works for you.

3. Create a holiday bucket

Consider how much you want to spend this holiday season, which may look a lot different than in past years. Create a separate bucket for holiday spending, then stop spending when that money is gone. You’ll thank yourself come January when you don’t have huge credit card bills.

4. Spend benefits you’ll lose

Take stock of the benefits you have that won’t roll over to 2024. Whether that’s unused vacation days, medical dependent care benefits, or money in your flexible spending account, use your workplace benefits to your advantage.

5. Make any last charitable contributions

December 31 is the last day your donations can go on your 2023 tax return. If giving to charity is part of your spending plan, use these three questions to make the most out of your charitable giving.

6. Pump up your 529 account

More than 30 states allow for a tax deduction for your contributions to a 529 plan. However, to count for this tax year, contributions must be made by December 31.

7. Max out your 401(k)

If you have a spouse who works as a W2 employee, 401(k) contributions made through December 31 count for the 2023 tax year. If you have extra cash and want to boost your savings, consider adding your spouse’s last 2023 paycheck to their 401(k).

8. Find your tax return

Tax season is right around the corner, so prepare yourself now, while you have some space and mental energy. You can also use this time to assess whether a Roth conversion is best for you.

9. Review your will and trust

With end-of-year reflections, you’re keenly aware of all the changes in life. Remember, your estate plan is also affected by those changes and needs to match your current situation. Checking your estate documents is especially important if you’ve gotten married, gone through a divorce, or had children in the past year.

10. Review your insurance documents

Just like your estate documents, your insurance policies should also cover your current needs. Review your life and disability policies to ensure they protect your income and those dependent on you. Also, your renters and homeowners insurance should protect any additional big purchases you made during the year, and your health insurance policy should be reviewed for any upcoming changes.

Resources + Links

• The bucket budget: How To Get Control Of Your Spending Without Tracking Every Penny

• Questions for charitable giving: How To Make The Most Of Your Charitable Giving

• States that offer a tax benefit for 529 plan contribution

• Brian Thompson Financial: Website, Newsletter, Podcast

• Follow Brian Online: Instagram, Facebook, LinkedIn, X (formerly known as Twitter), Forbes

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.