The Financial Numbers Your CPA Needs Before Building Your Year-End Tax Strategy

Every October, I talk to owners who ask what they’ll owe in taxes, and when I ask what their profit looks like so far, they say, “Pretty good, I think.”

That’s the problem. A year-end tax strategy built on “pretty good” is a guess. Your CPA needs real figures: what you’ve earned, which costs have crept up, what you’ve already paid in, and what big decisions you haven’t made yet. 

With those, they can estimate your bill, point out deductions you may have missed, and tell you whether that equipment purchase is worth making before December.

At Straight Talk CPAs, we treat financial reporting and tax planning as one job. Here’s what to have ready before your planning meeting.

Start with books that match reality

Your year-to-date profit and loss statement is where your CPA begins. It shows the revenue and expenses recorded so far and how much profit the company has made. But it’s only as good as the books underneath it.



If transactions are missing, expenses are in the wrong categories, or the bank accounts haven’t been reconciled, your reported profit may be off. That undermines any tax projection and makes it harder to spot deductions or changes worth a closer look.

Your CPA will compare this year’s numbers to last year’s. Revenue might be up 20%, but if subcontractor and payroll costs rose just as much, you haven’t actually made more money. That check only works if your books are current, which is why weekly entries and monthly closes matter. 

The IRS also expects records that back up your income and expenses, as it explains in its business recordkeeping guidance. 

Profit doesn’t tell you how much cash you have

The profit and loss statement covers one side of things. The balance sheet and your cash-flow information fill in what’s happening beyond earnings.

Your CPA may want to see bank balances, unpaid customer invoices, bills you owe, loan balances, and any recent equipment purchases. Those show how much cash you really have and what you’re on the hook for.

Take a company with healthy profits that’s still waiting on several large customer payments. The owner is thinking about another investment, or getting ready to make a tax payment. Without the receivables, the upcoming obligations, and a cash-flow forecast, the profit number can’t say how much money is actually available for either one.

It matters for tax strategy too. A purchase might come with a tax benefit under the rules, but you still need the cash for it, and you still need to think about working capital.



When your CPA can read the financial statements next to the cash-flow forecast, the tax side and the operating side get weighed together, and you’re deciding based on what the business can support.

The tax figures that deserve a closer look

Once your CPA understands how the business is performing, the next step is your wider tax position. Your prior-year return gives useful background, like your filing structure and anything carried forward. The current year’s records show what’s changed and which rules apply now.

A few items matter most. Start with your estimated tax payments. Bring records of the federal and any state estimates you’ve made, so your CPA can compare them to your projected liability and tell you whether to adjust. The IRS explains how estimated payments relate to expected income in its estimated tax guidance.

If you own an S corporation, your CPA needs current payroll records, your wages, and your distributions. They’re taxed differently, and reasonable pay for an owner who works in the business is a big part of staying compliant.

Then there are major purchases. Send invoices, receipts, and details on any equipment or other significant property you bought this year. Depending on the type of cost and the rules, it may be deductible right away, qualify for a special expensing provision, or be recovered over time through depreciation.

Last, share what you have on credits and retirement contributions: payroll and employee information, investment details, and retirement plan records. Those help your CPA check whether you qualify for particular credits or deductions and whether any deadlines apply. 

Every expense or contribution doesn’t produce the same result, so the answer comes from your actual circumstances.

Your forecast can show you what’s still possible

Historical figures explain what already happened. Your forecast helps your CPA look at what could happen before December 31.

Bring updated revenue expectations, planned hires, possible bonuses, big purchases you’re considering, and any major changes to operations. If a large contract is about to push income higher, your CPA can update the projected tax position before the year ends.



The same goes if expenses or collections are moving differently than you expected. A forecast built on assumptions from several months ago isn’t much help.

These conversations also bring pending decisions into focus. An owner considering new equipment has to weigh the operational benefit, the cash on hand, and the likely tax treatment. An owner expecting much higher profit may need to revisit estimated payments or look at other planning options.

Timing is the key. When your CPA has reliable numbers and knows what you’re still deciding, there’s more room to look at your options before the year-end deadlines pass.

Get more out of your financial reports

Gathering documents the week before a meeting isn’t enough. Accurate books, regular financial statements, and updated forecasts give your CPA a clearer view of the business all year long.

At Straight Talk CPAs, we handle the financial reporting, the tax planning, and the CFO-level advice together. We look at profit, cash flow, and the decisions coming up in one go, so the tax savings we find don’t leave the business short on cash.

Before your next planning session, make sure your books are current and your tax payments are written down somewhere. Then tell your CPA about anything you expect to change before the year ends. That’s what lets them build a strategy around your real numbers.

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