If you’re a business owner who just had your taxes calculated and your breath stopped when you saw how much you owe, you’re not alone.

This guide walks through what you didn’t do last year, what you can still do right now, and what you must do going forward so you don’t find yourself in this position again.

What You Didn’t Do Last Year (And Can’t Fix Now)

Let’s start with the hard truth. There are some things that, once the year is over, cannot be changed.

You cannot backdate payroll. Once the year ends, payroll for that year is locked.

If you operate as an S corporation, the IRS requires that you pay yourself a reasonable salary based on the work you perform.

You cannot:

• Reclassify distributions as payroll after the fact
• Take only distributions and skip payroll entirely
• Invent deductions that don’t exist

These mistakes are common—and dangerous. They can lead to penalties, audits, and serious tax issues.

What You Can Still Do for the Year That Just Ended

Now for the good news. There are things you can still do to reduce your tax bill—even after the year has ended.

This is where working with a trusted CPA firm can make a major difference.

Retirement Contributions

Many business owners resist retirement contributions because it feels like giving money away.

But ask yourself this: Is it better to keep the money in your name, or give it to the IRS?

If you’re an S corporation owner, options may include:

• Solo 401(k)
• Traditional 401(k)
• Defined benefit plans

In many cases, these plans can be funded after the year ends.

For example, contributing $20,000–$25,000 and saving roughly 30% in taxes can mean thousands of dollars kept in your pocket instead of paid out in taxes.

This is a core part of smart tax planning.

Section 179 Deductions

Don’t forget about assets you already purchased.

Section 179 allows for 100% deduction of qualifying equipment and vehicles.

A $30,000 asset at a 30% tax rate can mean $9,000 in tax savings—but only if it’s properly recorded.

This is where strong recordkeeping and coordination with bookkeeping becomes critical.

Cost Segregation Studies

If you purchased property, you may still be able to perform a cost segregation study.

This breaks a building into components that depreciate faster, creating a much larger deduction upfront instead of spreading it over 39 years.

This applies to:

• Commercial property
• Rental properties
• Airbnbs

Since corporate returns aren’t due until March 15, there is often still time.

What You Must Do Going Forward

This is where most business owners can make the biggest change.

Monthly Bookkeeping

Many business owners don’t keep up with bookkeeping on a monthly basis.

Professional bookkeeping typically costs between $400–$600 per month, or roughly $4,800–$7,200 per year.

But a good bookkeeping system does more than just track numbers. It:

• Organizes your business properly
• Helps capture deductions you might miss
• Creates the foundation for proactive tax planning

This is essential for controlling taxes instead of reacting to them.

Ongoing Tax Planning

If you’re asking, “What can I do for last year?” the answer is usually: not much.

If you’re asking, “What can I do for this year?” the answer is: a lot.

Ongoing planning allows you to:

• Control payroll timing
• Plan retirement contributions
• Avoid massive year-end tax surprises

This is especially important for S corporation owners and those with complex income, including business tax considerations.

What If You Already Owe $25,000 or More?

If you can pay the tax bill in full, do it.

If not, you have options:

• Installment agreements with the IRS (around 8% interest)
• Other financing options, depending on cash flow

An installment plan isn’t ideal—but starving your business of cash flow can be worse.

The real solution is preventing this from happening again through planning and better financial oversight.

Frequently Asked Questions

1. Can I fix payroll mistakes after the year ends?

No. Payroll cannot be backdated once the year is closed.

2. Can I take only distributions from my S corporation?

No. The IRS requires owners to take a reasonable salary.

3. Can retirement plans still reduce last year’s taxes?

Yes. Some plans can be funded after year-end with proper setup.

4. What is Section 179?

It allows 100% deduction of qualifying assets purchased during the year.

5. Is bookkeeping really worth the cost?

Yes. Good bookkeeping helps prevent missed deductions and enables tax planning.

6. How do I stop getting hit with big tax bills?

By planning ahead. Many business owners benefit from structured planning and even a CFO-level approach to managing cash flow and taxes.

Final Thoughts: Control Taxes Before They Control You

Big tax bills don’t usually happen because of one mistake.

They happen because of a lack of planning.

Once you know what went wrong, you can fix it going forward.

With the right systems, guidance, and planning in place, taxes become predictable—and manageable.