As December winds down, there’s still time to take strategic financial steps that may help reduce your tax bill before the year ends. For individuals and small business owners in Conway and throughout South Carolina, these final weeks are an opportunity to make informed decisions that can have a meaningful impact come tax season.

At Peavy & Associates, we help clients identify smart, last-minute financial moves that align with their goals and comply with current tax laws. Here’s what you should consider doing before December 31.

1. Accelerate or Defer Income Strategically

Depending on your financial situation, it may make sense to either accelerate income into this year or defer it to next year.

Examples include:

• Delaying invoices until January
• Deferring bonuses where possible
• Timing asset sales carefully

An accountant can help determine which strategy makes the most sense for your tax bracket and long-term plan.

2. Prepay Deductible Expenses

Paying certain expenses before year-end may allow you to deduct them on this year’s return.

Common deductible expenses include:

• Business supplies and equipment
• Professional fees
• Mortgage interest or property taxes (if applicable)
• Medical expenses that exceed deduction thresholds

3. Review Capital Gains & Losses

If you’ve sold investments this year, reviewing capital gains and losses before December 31 is critical.

• Tax-smart strategies may include:
• Harvesting capital losses to offset gains
• Rebalancing your investment portfolio
• Avoiding unexpected tax exposure from asset sales

4. Confirm Retirement & Health Account Contributions

December is the last chance to make or adjust certain contributions that may reduce taxable income.

Before year-end, review:

• 401(k) contribution limits
• IRA or Roth IRA eligibility
• Health Savings Account (HSA) contributions

5. Small Business Owners: Evaluate Payroll & Contractor Payments

Ensuring payroll and contractor records are accurate now can prevent delays and penalties later.

Important steps include:

• Confirming employee vs. contractor classification
• Verifying W-9 information
• Preparing for January W-2 and 1099 filings

6. Don’t Overlook State & Local Tax Considerations

South Carolina tax rules can differ from federal regulations. Proper planning ensures you’re not missing deductions or credits available at the state level.

Take Action Before the Clock Runs Out

Once December 31 passes, many tax-saving opportunities disappear. Taking action now allows you to reduce stress, avoid surprises, and start the new year financially prepared.

At Peavy & Associates, we provide proactive tax planning and accounting services for individuals and businesses in Conway, South Carolina.

Schedule your year-end tax consultation today and make the most of the opportunities still available before December 31.

An increasing number of people are launching their own businesses. Government figures indicate that ¼ of the self-employed have an incorporated business operation. However, a full ¾ of all self-employed people have an unincorporated enterprise.

Nearly 11 percent of people in the U.S. are self-employed, representing 15 million individuals. It includes home-based businesses, those in the gig economy, entrepreneurs, startups, and small business endeavors.

Tax time is especially painful financially for the self-employed. They have to pay state and federal taxes, and may need to pay city taxes. Individuals need to pay FICA taxes and are forced to pay a self-employment tax. The good news is that there are a variety of deductions that can help ease the pain at tax time.

Home Office

Those that work out of their home can deduct a portion of the total area of their home’s square footage if they’re self-employed, but not if they work for someone else. The space will have to be used regularly, be the principal place of business, and only be used for business purposes. Individuals can deduct the cost of rent for business space.

Credit Card Interest

Qualified business purchases placed on a credit card may be deductible. It can include phone bills, business travel, meals rent, internet service, office equipment, membership dues for professional organizations, and other expenses/utilities necessary for operating the business.

Training and Education

Taking a course to maintain or improve current skills relating to the business may be tax deductible. Expenses includes the cost of the course, tuition, books and supplies, and transportation.

Insurance Premiums

Premiums for business insurance are deductible for those who are self-employed.

Self-Employment Tax

The IRS allows people that are self-employed to deduct 50 percent of their total self-employment tax, subject to certain income limits.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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Any business owner that’s been considering the installation of an alarm system should know they can deduct the cost on their federal tax return. The IRS recognizes a variety of qualifying equipment ranging from fire alarms to security systems if they were purchased or financed during the tax year.

Businesses can deduct the entire purchase price up to a specified limit and fire protection systems can now be written off. Allowable expenses include heat and smoke detection units, sensing devices, audible alarms, sprinkler systems, motion detectors, and door and window locks. Monitoring services may be deductible.

Individuals that work from home can deduct the cost of a security system as a business expense, within limits. The line between home office and business can be a little blurry. It’s best to hire a tax professional that is well-versed in the intricacies of the law. Those that work from home due to the COVID-19 pandemic don’t qualify, as they’re employees not business owners.

To claim a security system installed at a home as a business expense, individuals will need to prove that the home is their principal place of business where they meet with patients or clients. The home must also be the exclusive space where inventory is stored. Daycare facilities and properties for rental use are included.

Individuals will need to establish the allowable area where business is conducted. The IRS allows people to deduct a portion of the security system in relation to the area actually used for business purposes. There are two ways that percentage can be determined, so be sure to calculate both ways for the maximum benefit.

As with all IRS rules, there are exceptions. The business expense can’t equal or exceed the individual’s income. However, business owners operating a business from their home can claim depreciation of the system for the portion that protects the business space.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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