Take control of your fiscal year end in five easy steps.

1. Tax return checklist. What tax returns does your company have to file, and when are they due? The most common: income tax (state and federal, business and personal), payroll tax, 1099s, sales tax, city business tax, county property tax, and annual 401K filing. Aggressively work this punch list so you can file your returns then focus on a successful 2006.
2. Tie up the loose ends in your books. Have your bookkeeper do a line-by-line analysis of each account. Enter all out of pocket expenses and mileage; tie out year-to-date payroll and retirement plan calculations; resolve items in suspense; and get ready for year-end inventory physical count. Prepare to close the books by February 15th, 2006, then ship them off to your CPA.
3. Tune up your paycheck. If you get a W-2 paycheck from your corporation, make sure it’s tracking toward your target levels of income tax withholding to avoid penalties, interest and an unpleasant surprise on April 15th. Check your rate of retirement plan deferral: on track to meet your target? These are all tax-smart strategies. See Paycheck as a Financial Tool for more information on this topic.
4. Year-end tax planning. Call your CPA if you haven’t done your year-end tax planning yet. It’s not too late to rough out your strategy and make end of year moves that combine business and personal, this year and next. Remember that in most cases, the December 31st deadline is unforgiving. Two common examples:
   • To take the section 179 accelerated depreciation deduction, new equipment is supposed to be placed in service by year’s end – not just ordered or paid for.
   • If your last payroll period ends 12/31/05 with checks cut 1/5/06, that money will not be included on your 2005 W-2. Gear your strategy to the actual paycheck date itself.
5. Make money. Optimize, not necessarily minimize, your income tax liability this year. Early stage entrepreneurs shouldn’t focus so much on beating down this year’s taxable income that they leave dollars on the table. Bankers and investors want to see a profit on your tax returns. Close the deal, ship the product, and work the billable hours – astute financial managers know how to make a profit year after year.