For financial advisor business owners, year-end tax planning often begins with a familiar question: What can I still deduct before December 31?

But according to Catherine Tyndale, CPA, of Dominion, that's not where effective tax planning should start.

The better question is: Do you actually know how much your business earned, how much tax you'll owe, and which decisions are still worth making before year-end?

In a recent Financial Experts Network webinar, Year-End Tax Planning for Financial Advisors: The Actual Process for Knowing What You Owe and What You Can Still Do About It, Catherine shared the practical five-step process she uses with independent RIAs, broker-dealer-affiliated advisors, and other financial advisory firm owners.

Her approach goes beyond finding deductions. It focuses on building reliable financial information, identifying meaningful tax-saving opportunities, and making informed decisions about business cash.

1. Before You Plan for Taxes, Make Sure Your Numbers Are Right

One of the most common problems Catherine encounters isn't a missed deduction. It's inaccurate financial statements.

Many advisory firm owners rely on their bookkeepers to categorize transactions without realizing that their financial statements may contain errors that significantly affect taxable income.

For example, owner distributions might be incorrectly recorded as business expenses. Personal estimated tax payments may appear on the profit-and-loss statement. Revenue received from a custodian may be recorded after platform fees have already been deducted, making the firm's operating margins appear better than they actually are.

Catherine recommends reviewing both the profit-and-loss statement and the balance sheet, along with supporting bank reconciliations, loan statements, payroll records, and custodian billing reports.

The balance sheet is particularly important because incorrect asset, liability, or equity balances may reveal errors that affect reported profits.

There's also an important distinction between financial accounting and tax accounting. Many advisory firms maintain accrual-basis financial statements for regulatory purposes but may use cash-basis accounting for tax purposes when permitted.

If those differences aren't properly reconciled, tax projections can be misleading.

The lesson: Even the most sophisticated tax strategy won't produce reliable results if the underlying financial information is wrong.

2. Know What You'll Earn Before Calculating What You'll Owe

Once the books are accurate, the next step is forecasting business performance through December 31.

For many advisory firms, this is relatively manageable. Recurring advisory fees, payroll, software expenses, and other operating costs can often be estimated with reasonable accuracy.

But Catherine cautioned against simply taking one month's expenses and multiplying them by the number of months remaining.

Instead, advisors should account for anticipated bonuses, annual renewals, unusual expenses, planned investments, and any changes in revenue.

That projected business profit then becomes part of the owner's overall tax projection, along with W-2 income, investment income, retirement contributions, charitable deductions, and other relevant items.

One particularly important distinction for pass-through business owners: Taking money out of the business isn't necessarily what creates the income tax liability.

An S corporation owner, for example, may owe income taxes on business profits even when those profits remain in the company.

Catherine also recommended looking ahead to 2027. Understanding whether next year's income is likely to be higher or lower can help determine whether accelerating expenses or deferring certain decisions makes financial sense.

3. The Biggest Tax Savings May Have Nothing to Do With Spending More

Once projected taxable income is established, advisors can evaluate their planning opportunities.

Catherine recommends starting with strategies that don't require spending additional cash.

For S corporation owners, that means reviewing reasonable compensation and ensuring the business is using an appropriate entity structure.

Another potentially significant opportunity is the state pass-through entity tax election. Depending on the state and the firm's circumstances, these programs may provide meaningful federal tax benefits.

The qualified business income (QBI) deduction also deserves attention.

Many financial advisory firms are classified as specified service trades or businesses, meaning the QBI deduction can phase out as taxable income increases.

For advisors near the phaseout thresholds, the effective marginal tax impact can be surprisingly high. A properly timed deduction could therefore produce a greater benefit than expected.

These calculations can be complicated, making professional tax modeling especially important before year-end.

Should You Spend Money to Save Taxes?

Catherine offered a useful perspective on year-end business spending.

Buying something simply to reduce taxable income is rarely a good strategy.

Instead, ask whether the expenditure solves a meaningful business problem.

Would hiring another employee free up time for business development? Would upgrading technology improve efficiency? Could an investment increase capacity or improve the client experience?

If the answer is yes, the tax deduction may enhance an already worthwhile investment.

But if the business doesn't need the expenditure, preserving cash and paying the resulting taxes may be the better decision.

As Catherine explained, every dollar spent also has an opportunity cost. Once that money is committed, it's no longer available for future acquisitions, hiring, or unexpected opportunities.

4. Retirement Contributions and Charitable Giving Require a Bigger-Picture View

Retirement contributions are often among the first strategies business owners consider when looking to reduce taxable income.

Catherine encouraged advisors to evaluate these decisions carefully.

Traditional retirement contributions generally defer taxes rather than eliminate them, and the eventual benefit depends partly on future tax rates.

For business owners, there is also the question of liquidity. Money contributed to a retirement plan is no longer readily available for business investment.

That doesn't mean retirement contributions are inappropriate. In some circumstances, larger contributions or cash balance plans may be attractive. But they should be evaluated alongside the firm's other financial priorities.

Charitable giving can also provide planning flexibility, particularly during unusually high-income years.

Catherine discussed how donor-advised funds can help business owners coordinate charitable deductions with their income while distributing grants to charities over time.

Contributing appreciated securities may provide additional advantages when appropriate.

The common thread is that tax decisions should support broader financial objectives—not drive them.

5. Meeting the Estimated Tax Safe Harbor Doesn't Mean You're Fully Funded

One of the webinar's most practical lessons concerned estimated tax payments.

Catherine emphasized the difference between meeting the IRS safe-harbor requirements and actually setting aside enough money to pay the full projected tax liability.

For a business experiencing a particularly profitable year, safe-harbor payments may be substantially lower than the final amount owed.

That can create an unpleasant surprise when the return is filed.

Advisors should also remember that April may bring two obligations at once: the remaining balance for 2026 and the first-quarter estimated payment for 2027.

Catherine discussed using quarterly estimated payments or withholding, depending on the owner's circumstances and administrative preferences.

Her broader recommendation was to calculate the expected liability accurately, establish a payment process, and reserve cash as profits are earned.

Overpaying taxes unnecessarily can also create problems by tying up money that could otherwise support the business.

6. Make Tax Planning a Year-Round Process

The final step is preparing for tax reporting.

After December 31, advisory firms should complete their bookkeeping reconciliations, close the books, organize supporting documentation, and confirm who is responsible for required Form 1099 filings.

Catherine noted that 1099 reporting can sometimes fall through the cracks when neither the bookkeeper nor the tax preparer clearly owns the responsibility.

More importantly, she encouraged advisors to repeat the financial review and tax projection process throughout the following year.

Waiting until November or December limits the available options.

Regular forecasting creates opportunities to adjust compensation, evaluate investments, manage cash reserves, and make tax decisions while there's still time to act.

Five Questions Every Advisory Firm Owner Should Ask Before December 31

Based on Catherine's presentation, these five questions provide a practical starting point:

1. Are my financial statements accurate? Have revenue, bank accounts, loans, and owner transactions been properly reconciled?
2. What is my projected taxable income? Does my forecast include the entire household's tax situation?
3. Am I missing structural tax opportunities? Have I reviewed reasonable compensation, state PTE elections, and the QBI deduction?
4. Would additional business spending create real value? Am I investing in growth or simply chasing deductions?
5. Do I have enough cash reserved for taxes? Have I planned for both my remaining 2026 liability and upcoming 2027 payments?

The Bottom Line

Year-end tax planning shouldn't be a scramble to find deductions during the final weeks of December.

For financial advisory firm owners, it's an opportunity to understand the business more clearly, make better financial decisions, and avoid costly surprises.

Catherine Tyndale's five-step process offers a practical framework: verify the financials, forecast taxable income, evaluate planning opportunities, finalize tax payments, and prepare for reporting.

The result isn't simply a potentially lower tax bill. It's a more disciplined approach to running a financially healthy advisory practice.

And perhaps the most important takeaway is that the best tax decision isn't always the one that produces the largest deduction. It's the one that leaves the business owner in the strongest overall financial position.

About the Presenter

Catherine Tyndale, CPA, specializes in tax advisory services for financial advisory business owners through Dominion. Her work focuses on helping RIAs, investment advisor representatives, and other financial professionals improve tax planning, financial reporting, and business decision-making.

About Financial Experts Network

Financial Experts Network provides continuing education webinars, expert-led Masterclasses, and on-demand educational programs for financial professionals.

Visit www.FinancialExpertsNetwork.com to explore upcoming webinars and membership opportunities.

Disclaimer: This article summarizes educational content from the November 5, 2026 webinar. Tax rules and planning opportunities depend on individual circumstances and applicable law. Consult a qualified tax professional before implementing specific strategies.