5 Mid-Year Tax Moves to Save You Money in December

Mid-year tax planning isn’t just a “nice-to-have” for business owners—it’s a game changer. Think of it as halftime during a game. You’ve seen how the first two quarters played out, and now it’s time to adjust your strategy, tighten up your playbook, and come out strong for the second half. Waiting until December to think about taxes? That’s like trying to cram a whole year’s worth of planning into one quarter. By then, your hands are tied.

Here’s the good news: making a few strategic tax moves now—before Q3 gets rolling—could lead to thousands in savings when it’s time to close the books. Straight Talk CPAs helps business owners across the country use mid-year insights to shift their tax trajectory. Here are five of the most effective plays to make before December creeps up.

1. Review Your Entity Structure—Seriously

It’s easy to set up a business entity when you’re just starting out and then forget all about it. But what worked two years ago (or even six months ago) may be holding your business back today. Different structures—sole proprietorship, LLC, S-corp, C-corp—come with very different tax treatments.

For example, many LLCs that cross a certain profit threshold may benefit by electing S-corp status. Why? Because it can reduce your self-employment tax burden. The IRS only taxes the reasonable salary portion of your income for Social Security and Medicare, not your full business profits. That single shift could save a six-figure earner upwards of $8,000–$10,000 annually.



Mid-year is the perfect time to assess this because there’s still time to file a late S-corp election (using Form 2553) and take advantage of the benefits this year. Straight Talk CPAs walks clients through a comprehensive entity review to uncover missed opportunities like this.

2. Track and Accelerate Deductible Expenses

The key to tax savings is knowing what the IRS lets you write off—and when. Many deductions hinge on when the expense is paid, not when it’s incurred. So, if you’ve got expenses coming up in Q4 (like software renewals, marketing campaigns, or equipment upgrades), consider moving those into Q3 or even July if cash flow allows.

Prepaying rent, stocking up on supplies, or purchasing business tools now could allow those expenses to count toward this year’s tax deductions. That means a lower taxable income come December, and more money staying in your business.

Use this mid-year window to compare year-to-date spending against projections. If you’re tracking lower-than-expected income, it could make sense to frontload more deductions now.

3. Max Out Retirement Contributions

If your business offers a retirement plan—like a SEP IRA, SIMPLE IRA, or Solo 401(k)—you’ve got a golden opportunity to reduce taxable income and build future wealth. Most business owners think of retirement contributions at year-end or tax time. But by planning mid-year, you can spread contributions over several months and avoid the Q4 cash crunch.

Let’s say you’re a solo entrepreneur with no employees and $100,000 in net profit. You could contribute up to $22,500 in salary deferrals (or $30,000 if you’re 50+) to a Solo 401(k), plus up to 25% of compensation as an employer contribution. That’s a huge tax deduction that doubles as a long-term investment.

Mid-year is also a great time to reassess whether your current retirement plan is the right fit. Our team often recommends plan upgrades that maximize benefits based on growth, employee count, and income.

4. Run a Mid-Year Tax Projection

This is where the rubber meets the road. A mid-year tax projection—done properly—gives you a snapshot of what your tax liability would look like if the year ended today. With that insight, you’re not guessing. You’re planning.

At Straight Talk CPAs, we run these projections to identify:

• If you’re on track with estimated payments
  
• Whether you're in danger of underpayment penalties
  
• Opportunities to reduce income via smart deductions or deferrals
  
• Timing strategies that can shift taxable income to future years

Without this kind of check-in, many business owners either overpay (leaving money on the table) or underpay (inviting IRS penalties). A projection done in June or July gives you time to adjust—not scramble.

5. Adjust Payroll Withholdings and Owner’s Draw

Another overlooked mid-year move? Tweaking how you pay yourself.

For S-corp owners, it's crucial to pay yourself a reasonable salary. But how “reasonable” is defined can shift as your business income grows. If your profits have jumped this year, increasing your salary to match could help keep your payroll tax ratios healthy and reduce audit risk. On the flip side, if your income has dropped, you might be overpaying.

This is also the time to adjust estimated taxes if your spouse's income changed, or you added a side business. If you’re relying on payroll withholdings to cover your tax bill, mid-year is your chance to fix course before the IRS starts charging interest.



A CPA can help evaluate your payment methods—W-2, owner’s draw, or a mix—and recommend tweaks that reduce your overall tax burden.

Real-Life Example: The $17K Surprise

One client, a medical consultant in Phoenix, came to us mid-year earning $190K through a single-member LLC. She hadn’t made any retirement contributions and was filing as a sole prop. We ran a mid-year projection and suggested a shift to S-corp status, retroactive to January 1, plus a new Solo 401(k) plan.

The result?

• $10,000 saved in self-employment taxes
  
• $7,000 saved through retirement contributions
  
• All implemented before Q4 began

By December, she wasn’t scrambling. She was celebrating.

Don’t Let December Catch You Off Guard

Tax savings aren’t just a year-end sport. The smartest strategies unfold during the summer while there’s still time to maneuver. Whether it’s changing your entity, optimizing deductions, or forecasting what’s ahead—mid-year is the moment to act.

Straight Talk CPAs helps business owners make sense of their numbers and use them to grow—not just comply. Our approach blends real-time data with proactive planning so December doesn’t sneak up and take a bite out of your profits.