It’s Not About Taxes. It’s About Tax Planning.

Content by: Go Figure Accounting

Forget what you think you know about year-end taxes. It’s really not about receipts and charitable giving and maximizing deductions. It’s actually all about tax planning. Especially for Managed Service Providers (MSPs) and cybersecurity professionals, who have an incredible opportunity to take control of their finances and make smart moves before the year wraps up.

In fact, the steps you take right now can make a major difference. With the right strategies in these four key areas, you can strengthen your business’s financial foundation, save on taxes, and position yourself for a successful, stable year ahead.

1. Take Stock of Your Finances and Revenue

First up: get a clear picture of where you stand financially as the year closes. For MSPs, whose cash flow often depends on project deadlines and retainer renewals, this is especially important. Review your income, expenses, and projections to understand where you’re likely to land with taxable income by December 31.

• Defer Income or Accelerate Expenses: If revenues are high, think about deferring some income into the next year or accelerating deductible expenses—like software licenses or hardware investments—before year-end. These adjustments can reduce taxable income and open up room for smart, long-term investments.

2. Check Your Contracts and Renewals

Year-end is also an ideal time to review service contracts, software subscriptions, and maintenance renewals. For MSPs and cybersecurity professionals, these agreements are not only essential for business operations but can impact your taxes too.

• Service Contracts: Do you have clients renewing their contracts? Make sure these agreements still align with your offerings and pricing. Adjusting or upgrading services now can also affect when revenue hits, helping you control tax timing.
• Software and Tools Subscriptions: Software costs can add up fast, but they’re often deductible. Look at upcoming renewals or see if an upgrade makes sense to reduce this year’s taxable income. Bundled solutions can also cut costs while streamlining your tax strategy.
• Licensing and Compliance: If you’ve added or adjusted services this year, make sure all your certifications and licenses are up-to-date. Not only will you maximize tax benefits, but you’ll also stay compliant with industry standards.

3. Assess Your Team and Infrastructure

The demand for skilled IT and cybersecurity expertise is only growing, so make sure your team is set up for success. Year-end is a great time to evaluate whether you need to bring on more talent, adjust roles, or invest in training. Adding key team members before December 31 can make certain onboarding costs tax-deductible. This means you can build your dream team while keeping your tax bill manageable.

4. Evaluate Employee Benefits and Retirement Plan Options

Investing in employee benefits and retirement plans is essential to stay competitive in the talent-driven tech sector. Offering comprehensive benefits, including robust retirement plans, not only attracts and retains top talent but also positions you to maximize tax savings. Contributions to employee retirement accounts are often tax-deductible, reducing your taxable income. A proactive approach now ensures you enter the new year with a strong tax strategy and a motivated, loyal team that’s ready to support your growth.

5. Invest in Security Infrastructure

For cybersecurity firms especially, infrastructure is a core part of staying competitive. If you’ve been considering upgrades to servers, security appliances, or software, now’s the time. These investments are often deductible or depreciable, reducing taxable income. Plus, these enhancements strengthen your offerings and reduce the risk of cyberattacks that could impact your clients—and your reputation.

Start Now for a Better 2025 Bottom line: the next two months are your chance to be proactive! By addressing the essentials listed here, you can pave the way for a smoother tax season with fewer surprises and a more secure, prosperous start to 2025