New Year, New You: Stop Getting Surprised By Your Tax Bill
THE NEW YEAR'S RESOLUTION THAT PAYS YOU TO KEEP IT
While 80% of people abandon their New Year's resolutions by February, there's one resolution that pays you to keep it:
"I will never be surprised by my tax bill again."
Sounds simple, right? Here's why most people fail at this resolution: They think tax planning happens once a year when their CPA runs the numbers in April.
Wrong.
Tax planning happens all year long. Tax panic happens in April.
Most people never build the foundation that makes smart year-round decisions possible. January gives you the breathing room to build that foundation before the year gets chaotic.
The difference? Thousands — sometimes tens of thousands — in avoidable taxes and penalties.
Is This You?
Let me guess what you're thinking as you read this:
"I should get my taxes organized..."
"I'll do better planning this year..."
"I should call my accountant soon..."
Sound familiar?
Here's what I know will happen based on years of panicked March phone calls:
You'll get busy with your business. January priorities will shift to client work. February will bring new opportunities that demand attention.
And March will arrive with the same scramble to find $7,500+ you weren't expecting to owe.
The cycle repeats because most people confuse tax compliance with tax strategy. Compliance is filing forms. Strategy is building systems that work all year.
The Three Things You Should Start Doing Now
It's January. You have a clean slate and 12 months ahead to get this right.
Real tax planning isn't a 47-point optimization checklist. It's three structural decisions that save you thousands, year after year.
Move 1: Get Your Books Right
You can't optimize what you can't measure.
Most business owners run their finances like this: make money, spend money, hope there's enough left for taxes.
That's not a system. That's gambling.
The fix is simple:
Set up accounting software to track everything in real-time. Then open a separate business bank account this week. Stop mixing personal and business expenses — it creates audit risk and costs you deductions.
Clean books unlock every other tax strategy:
- S-Corp salary optimization requires knowing your actual profit
- Retirement contributions need accurate income tracking
- Equipment purchases demand proper expense categorization
No clean books = no advanced strategies. It's that simple.
>> Don't want to handle it yourself? Better Bookkeeping connects your accounts and handles everything while you focus on growth.
Move 2: The Safe Harbor Protection
Here's a tax rule that eliminates $4,000-$8,000 in penalties with one calculation:
If you pay 110% of last year's total tax through quarterly estimates (100% if your income was under $150,000), you're protected from underpayment penalties no matter how much you make this year.
Example: 2025 total tax was $85,000. Your 2026 safe harbor payment is $93,500, split into four payments of $23,375.
Your income doubles to $600,000 in 2025? Doesn't matter. No penalties.
One calculation in January. Four identical payments. Zero stress.
Pro Tip: Set up automatic transfers of 30% of monthly profit to a high-yield tax savings account. By December, you'll have your full tax payment earning interest instead of scrambling for cash in March.
Move 3: The S-Corp Election That Pays Forever
If you're making $200,000+ as a sole proprietor, you're paying unnecessary self-employment tax on every dollar.
- $400,000 sole proprietor = $34,884 in self-employment tax
- $400,000 S-Corp with $160,000 reasonable salary = $24,698 in payroll tax
- Savings: $10,186
The setup takes one afternoon. The savings last forever.
But here's what most people miss: timing matters. S-Corp elections must be made by March 15th for the current year or by 75 days after the start of your tax year for new entities.
Miss the deadline? You're stuck paying the penalty for another full year, or paying penalties for late elections.
Why These Three (And Not Everything Else)
Every January, clients forward me articles about nitty-gritty tax optimization strategies.
Meal deduction tracking. Home office square footage calculations. Vehicle expense logs. Equipment depreciation schedules.
Here's the problem: Most tax strategies have terrible Return on Hassle.
Return on Hassle = Tax savings ÷ (Time + Money + Brain Damage)
Those moves will save you $3,000 after 40 hours of work. That's $75/hour — less than you make running your business.
The three moves above have infinite Return on Hassle:
- Clean books: One-time setup enables all future strategies
- Safe harbor: One calculation eliminates years of penalty risk
- S-Corp election: One-time setup, $12,640+ savings forever
This is why wealthy business owners focus on structure, not tactics. They optimize for peace of mind, not percentage points.
What Changes When You Do This
Here's what your March looks like after implementing these three moves:
Instead of panicked calls to your CPA, you have calm conversations about optimization opportunities.
Instead of scrambling to find $7,500 for taxes, you transfer money from your tax savings account that's been earning interest all year.
Instead of underpayment penalties, you get refund checks because your safe harbor payments covered you.
Instead of cash flow stress affecting business decisions, you have predictable tax obligations that never surprise you.
The goal isn't to pay zero taxes. It's to know what you owe, when you owe it, and have systems that handle it.
The January Window Is Closing
Tax season starts February 1st. By March 1st, every competent CPA is buried in compliance work until May.
You have three weeks to build the foundation that makes year-round tax planning possible.
The time to set up your planning infrastructure is now.
Your Next Move
Want to make 2026 the year you're never surprised by your tax bill?
Book your 2026 strategy session with Better Bookkeeping →
We help business owners build the systems that eliminate tax surprises. Monthly bookkeeping that enables smart decisions. Quarterly planning that prevents penalties. Year-round tax strategy that keeps more money in your pocket.
This isn't another tax preparation relationship where we talk once a year. This is year-round planning that turns April 15th into a formality.
Don't be the person calling me in March asking "What could have been?"
P.S. Entity structure decisions can't be reversed mid-year. If you're in the wrong structure for 2025, you're stuck with it. We can fix 2026, but every month you wait costs $1,000-$2,000 in unnecessary taxes.
P.P.S. This isn't advice for your specific situation, but if you're making $200K+ and filing as sole proprietor, you're leaving thousands on the table. The math doesn't lie.