So many business owners are doing nothing about taxes in July.
Tax season is over. They filed their returns in April (or got an extension), paid their bill, and moved on. Now they’re focused on running the business through the end of the year.
But if you’re waiting until January to think about taxes again, you’re making a huge mistake.
The best time to plan your taxes isn’t in April. It’s right now.
Why Mid-Year Is Your Tax Planning Sweet Spot
Think about it logically. You can’t change what already happened in the first half of the year. Those six months are locked in. Your income is what it is, and your expenses are what they are.
But you still have six months left to influence what happens next.
If you project your income and realize you’re on track to make significantly more than last year, you still have time to:
- Max out retirement contributions before year-end
- Make strategic equipment purchases
- Adjust your entity structure
- Shift income or expenses strategically
- Plan major business moves
But if you wait until December, all those opportunities disappear.
Let me give you an example:
Let’s say you’re a consultant. Through June, you’ve generated $200K in revenue and are on track for a $400K year. This is your best year ever.
If you realize this in July, you have options:
- Set up a SEP-IRA and contribute $69K before year-end (massive tax deduction)
- Invest in equipment your business needs (depreciation deduction)
- Plan for Q4 project work strategically
- Consider an S-corp election if it makes sense
- Adjust estimated quarterly payments
But if you don’t realize it until March when your CPA is preparing last year’s return? You’ve already paid taxes on all that income, and there’s nothing you can do about it.
That’s the difference between proactive and reactive. And mid-year is when you switch from reactive to proactive.
What You Should Be Doing Right Now
Here’s the concrete stuff you should tackle in July:
Step 1: Run Mid-Year Projections
Pull your financial statements through June and project where you’ll land by year-end.
Questions to answer:
- Based on current performance, what will your total revenue be?
- What will your expenses look like?
- What’s your projected profit?
- How does this compare to last year?
- Are you on track to have a significantly better, worse, or similar year?
This takes maybe an hour with clean books. If your books aren’t clean, that’s a separate problem we need to solve.
Step 2: Calculate Your Likely Tax Bill
Once you know your projected income, work with a tax professional (or use online calculators) to estimate what you’ll owe.
Don’t just guess. Get a real number, because it matters.
If your projected tax bill is $50K and you’ve only set aside $30K, you need to know that now. Not in April.
Step 3: Talk to a Tax Strategist
This is where you call your CPA or tax professional and say: “Based on my projections, here’s where I’ll land. What should we be doing between now and December to minimize my tax bill?”
If your CPA says, “Let’s talk about that at tax time,” find a new CPA. That’s not strategic planning.
A good tax professional should be able to give you 3-5 specific recommendations you can implement before year-end.
Step 4: Calendar Your Implementation
Once you have recommendations, don’t just say “I’ll do that later.” Put it on your calendar. This might look like:
- By August 15: Set up retirement account
- By September 30: Make equipment purchases
- By October 1: Implement payroll changes if doing S-corp election
- By November 15: Make retirement contributions
- By December 15: Final projections and catch-up moves
If something isn’t on a calendar with a deadline, it won’t happen. And if it doesn’t happen, you don’t get the tax savings.
This is where we come in as your implementation partner. We make sure these things get done.
Paying More Taxes Than You Need To?
We work with businesses to identify tax savings opportunities and implement them, so you keep more of what you earn. If you’re ready to stop overpaying the IRS, let’s connect.
Schedule Your Tax Savings Analysis
We’ll show you exactly what strategies could save you money and help you decide if a change is right for you.
The Three Scenarios You Might Be In Right Now
Scenario 1: “I’m Having a Better Year Than Expected”
This is a good problem to have.
If you’re tracking significantly higher income than you anticipated, you need to:
- Plan for the bigger tax bill
- Identify strategies to reduce it
- Make sure you have cash flow to pay what you owe
- Potentially adjust quarterly estimated payments for Q3 and Q4
The time to do this is now, not later.
Scenario 2: “This Is Looking Like a Slower Year”
If your business is struggling, you have different concerns:
- Are you going to have enough cash to get through the end of the year?
- Are your current projections accurate, or are you being optimistic?
- Do you need to make staffing adjustments?
- Should you defer big expenses to next year?
- Are there business moves you need to make?
You still need to plan. It’s just different planning.
Scenario 3: “I Have No Idea What’s Going to Happen”
This is the most common scenario, honestly. Most business owners haven’t looked at their financial statements since April (or never, if they’re honest).
They have no idea if they’re on track for a good year or a bad year. They have no idea what their tax situation will look like.
If this is you, getting clarity is your first priority. That should happen this week.
The Conversation You Need to Have With Your CPA
If you don’t already have a tax strategist, at minimum schedule a call with your current CPA and ask:
“I want to be more proactive about taxes this year. Can we do a mid-year check-in to project where I’ll land and identify strategies to reduce my tax bill?”
If they say yes, great. If they’re too busy or dismissive, that tells you something important about whether they’re a good fit for your business.
A good CPA makes time for this conversation. They understand that proactive planning saves their clients money and reduces stress.
The Biggest Mistake is Waiting
I know tax planning sounds boring. I know you’d rather focus on growing the business.
But ignoring it costs you money, real money. Thousands of dollars sometimes.
The business owner with $740K in revenue that we mentioned in another article? He’s now paying an extra $40-70K because nobody planned proactively.
You can prevent that. You just have to start now.
Mid-year is the perfect time. You have enough data to project with reasonable accuracy, but enough time remaining to do something about it.
So this week, do these three things:
- Pull your financial statements through June
- Project where you’ll land by year-end
- Schedule a call with a tax professional to discuss strategy
Those three things take about 3-4 hours total and could save you thousands.
That’s a pretty good ROI for an afternoon’s work.
Ready to Get Proactive About Your Taxes?
We can help you:
- Get clarity on your financial position halfway through the year
- Project your year-end numbers with accuracy
- Identify specific tax strategies you can implement before December 31
- Actually implement those strategies (this is the critical piece!)
- Coordinate with your CPA or connect you with a tax strategist
- Keep you on track with a calendar of deadlines
Don’t wait until April to think about taxes. Let’s get ahead of it now.
Schedule Your Mid-Year Tax Strategy Session
We’ll do a quick financial review, run projections, and identify exactly how much you could save by being proactive rather than reactive.
About Fruitful Enterprises: We believe business owners should maximize their tax savings. Mid-year planning is one of the easiest ways to keep more of what you earn, if you do it at the right time.