Year-End Tax Moves Every NJ Business Owner Should Make Before December 31

Tax season starts long before you file your return. The decisions you make between now and December 31 determine how much you owe next April.

Review Your Estimated Tax Payments

Compare what you’ve paid to date against your projected total liability. Underpayment penalties apply if you haven’t paid at least 80% of your current year’s liability for NJ or 90% for federal.

Defer Income, Accelerate Expenses

For cash-basis businesses, consider delaying invoices so payment arrives in January, prepaying deductible expenses before December 31, and purchasing needed equipment to claim Section 179.

Maximize Retirement Contributions

SEP-IRAs allow contributions up to 25% of net self-employment income. Solo 401(k) plans offer even higher limits. The employee deferral deadline is December 31.

NJ BAIT Election

If your business is a pass-through entity, evaluate the NJ Business Alternative Income Tax election. It effectively bypasses the $10,000 SALT deduction cap.

Review Your Entity Structure

If your LLC earned significantly more this year, S-Corp election for next year might save thousands. The deadline to file Form 2553 is March 15.

Document Everything

Organize receipts, reconcile your books, and make sure all business expenses are properly documented before the year closes.