Should You Buy Equipment Before Year-End?

As the calendar gets closer to December 31, many Florida business owners start asking the same question: Should I buy equipment before year-end to save on taxes?

For small business owners in Naples and across Florida—contractors, medical and dental practices, professional service firms, restaurants and hospitality businesses, real estate professionals, and self-employed individuals—equipment purchases can be a smart move. But the best decision usually comes from looking at the full picture: operations, cash flow, financing, and how the purchase may be treated for tax purposes.

Below are the most important points to consider before making a large year-end purchase.

Why Year-End Equipment Purchases Can Be Attractive

Equipment purchases can be attractive at year-end because they may:

• Support growth (more capacity, faster turnaround, better service)
• Improve efficiency (replacing outdated tools and technology)
• Reduce maintenance and downtime
• Help stabilize cash flow planning by locking in known costs
• Potentially create deductions through depreciation—depending on the facts and how the asset is used

Tax benefits can be part of the decision, but they shouldn’t be the only reason you buy something.

Why the Decision Should Not Be Based Only on Taxes

It’s easy to focus on the potential deduction and ignore the business reality: a deduction is not a dollar-for-dollar refund. You still spent the money (or took on financing), and the purchase still needs to make sense operationally.

Before buying, ask:

• Will this equipment generate revenue or reduce costs in a measurable way?
• Is the timing driven by business need—or by the calendar?
• Are you buying the right equipment, or simply buying something?
• Will the purchase create ongoing costs (maintenance, insurance, training, software subscriptions)?

In year-end tax planning, our goal is to help you make decisions you’ll still feel good about in March—after the excitement of “year-end planning” wears off.

Cash Flow Comes First: Can the Business Comfortably Afford It?

Even profitable businesses can run tight on cash—especially in seasonal industries and during slower months. A year-end purchase can create cash stress if it reduces your ability to cover:

• Payroll and payroll taxes
• Rent and insurance renewals
• Inventory and vendor bills
• Debt payments
• Upcoming estimated tax payments

This is where cash flow planning matters. If the purchase creates a cash crunch, the tax benefits may not be worth the operational risk.

Financing vs. Paying Cash: What to Consider

Financing can be helpful, but it changes the analysis.

When you finance equipment, we recommend reviewing:

• Down payment amount and timing
• Interest rate and total cost over the term
• Monthly payment impact on cash flow
• Whether the loan agreement has covenants or personal guarantees
• How the financing interacts with your ability to fund taxes, payroll, or retirement contributions

For many businesses, the “best” option isn’t simply cash vs. financing—it’s choosing a structure that keeps cash flow stable while supporting growth. We can review the financing impact during a planning conversation so the decision is based on real numbers.

“Placed in Service” Before Year-End: Timing Matters

One of the most common year-end issues we see is buying equipment in late December that isn’t actually ready to use until January.

In many situations, what matters for tax timing is when the equipment is placed in service—not just when it’s ordered, financed, or paid for. If delivery, installation, setup, or training delays push it into next year, the tax impact may not match your expectations.

If you’re buying something substantial (especially machinery, specialized medical/dental equipment, or technology systems), it’s worth reviewing the timeline before you commit.

Bookkeeping and Documentation Considerations (Often Overlooked)

Even when the purchase is legitimate and timely, poor documentation can create headaches later.

To keep your records clean, plan for:

• A clear invoice that identifies what was purchased
• Proof of payment and/or financing documents
• Delivery/installation records (when relevant)
• Proper categorization between supplies/repairs vs. equipment
• A process for fixed asset tracking (so depreciation is handled consistently)

If your books are behind, year-end equipment purchases can compound the problem. A bookkeeping cleanup before year-end often makes tax planning and depreciation planning significantly smoother.

Examples of Equipment Purchases That May Require Planning

Depending on your industry, year-end equipment planning may include:

• Contractors: trucks/trailers, heavy tools, jobsite equipment, safety equipment
• Medical/dental: imaging equipment, chairs, specialized instruments, practice technology
• Restaurants/hospitality: refrigeration, ovens, POS systems, furniture, kitchen upgrades
• Professional services: computers, servers, software systems, office build-outs, phone systems
• Real estate professionals: photography/video equipment, computer upgrades, signage, office equipment

Some of these items may be straightforward. Others require more careful review because of mixed personal/business use, installation timelines, or how they should be recorded in the books.

Common Mistakes We See at Year-End

Here are a few avoidable issues that can reduce the value of a year-end purchase:

• Buying equipment “for the write-off” without a clear business need
• Waiting too late and missing delivery or installation timelines
• Assuming something qualifies without reviewing the facts first
• Mixing personal and business use without tracking it
• Coding equipment incorrectly in bookkeeping (creating inaccurate financial statements)
• Forgetting to track the asset after purchase (no fixed asset schedule, inconsistent depreciation)
• Ignoring the cash flow impact of deposits, loan payments, or insurance costs

What We Review in an Equipment Purchase Planning Conversation

When clients ask, “Should I buy this before year-end?” we typically review:

• Current year-to-date financials and profitability (and whether the books are reliable)
• Estimated tax projections and timing of tax payments
• Depreciation planning considerations based on the type of asset and expected use
• Cash flow forecast for the next 60–120 days
• Financing terms and the real monthly payment impact
• Documentation needs and a plan for fixed asset tracking
• Whether any cleanup is needed to keep books tax-ready

This is part of our broader tax planning and advisory services approach—helping you make decisions with clarity, not guesswork.

Schedule a Year-End Tax Planning Review Before You Buy

If you’re considering a large equipment or technology purchase, don’t wait until the last week of December to decide.

Schedule a year-end tax planning review with our Naples, FL team before making major purchases. We’ll help you evaluate the tax impact (based on your facts), the cash flow impact, and the bookkeeping/documentation steps needed so the purchase supports your business—and doesn’t create surprises later.

Year-End Tax Planning for Business Owners

Year-end is one of the few times during the year when you can still make meaningful tax decisions before the clock runs out. By the time you’re gathering documents in January, many of the best opportunities are already off the table.

For small business owners in Naples and across Florida—including closely held businesses, S corporation shareholders, LLC owners, self-employed individuals, contractors, professional service firms, restaurants and hospitality businesses, and rental property owners—year-end tax planning is about more than reducing taxes. It’s about avoiding surprises, protecting cash flow, and making confident decisions with real numbers.

Below are the key areas to review before December 31, along with common missed opportunities we see when planning gets pushed to “later.”

Why Year-End Tax Planning Matters

Year-end tax planning helps you connect three things that don’t always line up automatically:

• Your profitability (what the books show)
• Your cash flow (what’s actually in the bank)
• Your tax exposure (what you may owe—and when)

A proactive plan can help you:

• Reduce or better manage your year-end tax bill
• Adjust estimated tax payments before deadlines
• Decide whether to accelerate expenses or defer income (when appropriate)
• Evaluate payroll, owner compensation, and contractor payments
• Coordinate retirement contributions and benefits
• Make equipment and technology purchases intentionally—not last-minute
• Start the new year with cleaner books and fewer unknowns

Key Planning Areas to Review Before December 31

1. Update Your Financials (Clean Books = Better Tax Planning)

Strong planning starts with accurate data. If your bookkeeping is behind—or if key accounts aren’t reconciled—your tax projection may be based on guesses.

Before year-end, we recommend having:

• Bank and credit card accounts reconciled
• Revenue recorded consistently (especially deposits and merchant processing activity)
• Payroll categorized correctly (wages, employer taxes, benefits)
• Owner draws/distributions coded properly
• Loan and credit card balances tied to statements
• A current profit & loss and balance sheet you can trust

If things are messy, a bookkeeping cleanup now can prevent delays, reduce tax-time stress, and improve the accuracy of year-end decisions. Many clients also benefit from moving into monthly accounting so tax planning isn’t limited to one season of the year.

2. Estimated Tax Projections and Cash Flow Planning

Estimated tax payments are one of the biggest sources of year-end surprises for business owners—especially those with variable income, seasonal revenue, or a strong fourth quarter.

A year-end plan should answer:

• Where do you stand year-to-date compared to last year?
• Are your estimated tax payments on track—or likely short?
• If a payment is needed, what is the best timing for cash flow?
• How will upcoming expenses (insurance renewals, inventory, slow season) affect liquidity?

We often build estimated tax projections alongside cash flow planning so the plan works in real life—not just on paper.

3. Entity and Payroll Considerations (S Corps, LLCs, and Owner Pay)

Your entity type and payroll strategy can significantly impact taxes.

Year-end is a smart time to review:

• Whether your current structure still fits your income level and goals
• For S corporations: whether shareholder payroll is in the right range and properly documented
• Whether distributions, reimbursements, and fringe benefits are being handled correctly
• Whether an entity election or restructuring should be evaluated for next year (planning often starts now, even if changes occur later)

If you have employees or contractors, year-end is also the time to complete a payroll and 1099 review so you’re not scrambling in January.

4. Retirement Plan Opportunities (Business Owners Often Miss These)

Retirement contributions can be one of the most effective tax-planning tools available, but they require coordination and deadlines.

Depending on your situation, planning may include:

• Reviewing options for the self-employed and owner-only businesses
• Coordinating with your financial advisor to determine contribution targets
• Confirming cash flow can support contributions comfortably
• Ensuring payroll and reporting are aligned with the plan requirements

We frequently help clients with retirement planning coordination so tax decisions, cash flow, and long-term goals stay aligned.

5. Equipment, Vehicle, and Expense Timing Decisions

If you’re considering equipment, technology, furniture, or certain business expenses, timing matters. Waiting until the final week of December often leads to rushed decisions that don’t fit operational needs.

A year-end planning meeting can help you decide:

• Whether upcoming purchases should happen this year or next year
• Which expenses you should accelerate (and which to avoid prepaying unnecessarily)
• How to plan for repairs, maintenance, subscriptions, and professional fees
• Whether any improvements are better treated as operating expenses vs. longer-term investments from a budgeting standpoint

The goal is to make purchases because they support the business—while also understanding the tax and cash flow impact.

Common Missed Opportunities We See

Business owners often miss year-end planning opportunities because:

• Bookkeeping isn’t current, so no one trusts the numbers
• Estimated payments weren’t updated when income changed
• Payroll and owner compensation weren’t reviewed until after year-end
• 1099 vendor information wasn’t collected during the year
• Equipment decisions were made too late (or made purely for tax reasons)
• Retirement planning wasn’t coordinated early enough

The sooner planning starts, the more options you have—and the fewer “surprises” you face after December 31.

How We Help (Naturally, Without Making It Complicated)

Our Naples, FL team supports business owners with a practical, numbers-first approach. Year-end planning often includes a combination of:

• Tax planning and scenario review
• Estimated tax projections
• Bookkeeping cleanup and financial statement preparation
• Monthly accounting for ongoing visibility
• Cash flow planning to support tax decisions with real-world timing
• Payroll/1099 review to reduce year-end compliance stress
• Retirement planning coordination with your advisor
• Ongoing advisory services to help you make decisions throughout the year

Schedule a Year-End Tax Planning Meeting (Before the Calendar Fills Up)

If your income changed this year, you had a strong season, you added employees or contractors, you’re considering equipment purchases, or you simply want to avoid a tax surprise, now is the time to plan.

Contact our office to schedule a year-end tax planning meeting before December 31. We’ll review your current financials, estimate where you’re headed, and help you build a clear, realistic action plan for year-end and beyond.

Cash Flow Planning for Florida Small Businesses

For many small business owners, profitability is only part of the financial picture. A business can show a profit on paper and still struggle to pay payroll, cover rent, purchase inventory, make loan payments, or set aside money for taxes.

That is why cash flow planning is so important—especially for Florida businesses that deal with seasonality, tourism cycles, storm-related disruptions, rising insurance costs, labor challenges, and changing customer demand.

If you own a small business in Naples or elsewhere in Florida, a cash flow review can help you understand where your money is going, prepare for upcoming expenses, and make better decisions before cash gets tight. With accurate bookkeeping, monthly financial statements, cash flow forecasting, budgeting, KPI tracking, and proactive advisory support, you can move from reacting to financial pressure to planning ahead with confidence.

Why Cash Flow Planning Matters

Cash flow planning helps business owners understand how money moves in and out of the business over time. It is not just about what happened last month—it is about preparing for what is coming next.

Strong cash flow planning can help you:

• Prepare for slow seasons and revenue fluctuations
• Cover payroll, rent, vendor bills, and debt payments on time
• Set aside funds for estimated taxes and year-end tax obligations
• Plan for equipment purchases, hiring, or expansion
• Avoid relying too heavily on credit cards or lines of credit
• Identify pricing, margin, or expense issues earlier
• Make better decisions using current financial data

For many business owners, cash flow planning provides peace of mind. Instead of wondering whether there will be enough cash to cover upcoming obligations, you can build a plan based on real numbers.

Common Cash Flow Challenges for Florida Businesses

Florida small businesses often face cash flow challenges that are different from businesses in other parts of the country. In areas like Naples, seasonality, tourism, real estate activity, and weather-related interruptions can have a major impact.

Seasonality

Many Florida businesses experience revenue swings throughout the year. Restaurants, hospitality businesses, contractors, retail shops, service providers, and tourism-related businesses may see stronger revenue during peak season and slower activity during the summer or off-season months.

Without planning, a strong busy season can create a false sense of security. If cash is not reserved for slower months, the business may struggle later in the year.

Storm-Related Disruptions

Hurricane season can affect revenue, staffing, operations, customer demand, insurance costs, and repair expenses. Even when a business avoids major damage, storms can still disrupt sales, delay projects, or create unexpected costs.

Cash flow planning helps businesses prepare for:

• Temporary closures
• Delayed customer payments
• Emergency repairs
• Insurance deductibles
• Supply chain delays
• Payroll during interruptions
• Revenue slowdowns after a storm event

Rising Costs

Florida businesses may face increases in insurance, rent, materials, utilities, wages, financing costs, and vendor pricing. If prices charged to customers do not keep pace with rising costs, profit margins and cash flow can tighten quickly.

Tax Payment Surprises

A profitable year can create a tax problem if estimated tax payments are not reviewed during the year. Business owners may spend available cash without realizing that a portion should be reserved for federal taxes, self-employment tax, payroll taxes, or other obligations.

An estimated tax review can help business owners avoid unpleasant surprises and coordinate tax planning with cash flow needs.

Growth Without Cash Planning

Growth can actually create cash strain. More sales may require more inventory, more staff, more equipment, larger deposits, or higher overhead before customer payments are collected.

Cash flow planning helps determine whether the business can support growth—or whether additional planning, financing, pricing changes, or cost controls are needed.

 

Profit vs. Cash Flow: Why They Are Not the Same

One of the most common misunderstandings in small business finances is the difference between profit and cash flow.

Profit is what remains after income and expenses are recorded.

Cash flow is the actual movement of money in and out of the business. A business may be profitable but still short on cash because of:

• Unpaid customer invoices
• Loan principal payments
• Owner draws or distributions
• Inventory purchases
• Equipment purchases
• Tax payments
• Credit card balances
• Timing differences between revenue and expenses
• Personal expenses running through the business

For example, a contractor may complete a profitable project but not collect payment for 45 days. During that time, the business still has to pay workers, subcontractors, suppliers, fuel, insurance, and overhead. On paper, the job may be profitable—but the cash may not be available when needed.

That is why monthly financial statements and cash flow forecasting are so valuable. They help business owners see beyond profit and understand whether the business has enough liquidity to operate smoothly.

Warning Signs of Cash Flow Problems

Cash flow issues often build gradually. By the time they become obvious, the business may already be under stress.

Watch for these warning signs:

• You are profitable on paper but constantly short on cash
• Payroll feels stressful even during decent sales months
• Vendor bills are being paid later than usual
• Credit card balances are increasing
• You are using tax money to cover operating expenses
• You are unsure how much cash should be reserved for taxes
• Customer invoices are taking too long to collect
• You do not review monthly financial statements
• Bookkeeping is behind or inaccurate
• You do not have a budget or cash flow forecast
• You cannot easily explain where the money went
• Busy season revenue disappears faster than expected
• You are surprised by tax balances, insurance renewals, or large recurring expenses

If several of these apply, it may be time to schedule a cash flow review.

 

Practical Cash Flow Planning Steps

Cash flow planning does not have to be complicated, but it does need to be consistent. The most effective plans are built on accurate financial data and reviewed regularly.

1.  Keep Bookkeeping Current

Reliable cash flow planning starts with reliable bookkeeping. If bank accounts are not reconciled, expenses are miscoded, or income is missing, cash flow projections may be inaccurate.

Current bookkeeping helps you understand:

• Actual revenue trends
• Monthly expense patterns
• Profit margins
• Owner draws or distributions
• Debt payments
• Accounts receivable and payable
• Cash available for taxes and operations

2.  Review Monthly Financial Statements

Monthly financial statements help business owners identify issues before they become larger problems.

Key reports may include:

• Profit and loss statement
• Balance sheet
• Cash flow statement
• Accounts receivable aging
• Accounts payable aging
• Budget actual report

These reports are most useful when reviewed with context—not just generated and filed away.

3.  Build a Cash Flow Forecast

A cash flow forecast estimates expected cash inflows and outflows over the next several weeks or months. This can help identify when cash may be tight and when the business may have room to invest, hire, pay down debt, or make tax payments.

A forecast may include:

• Expected customer payments
• Payroll dates
• Rent and utilities
• Vendor payments
• Loan payments
• Insurance premiums
• Tax payments
• Equipment purchases
• Seasonal slowdowns
• Owner draws

4.  Plan for Taxes Throughout the Year

Taxes should be part of cash flow planning—not an afterthought during tax season. Business owners should review estimated tax payments during the year and set aside funds for future obligations.

Tax planning and estimated tax reviews can help answer questions such as:

• Are current estimated tax payments enough?
• Should payments be adjusted before year-end?
• How much cash should be reserved for taxes?
• Will business profit be higher or lower than expected?
• Are there planning opportunities before December 31?

5.  Create a Budget

A budget gives your business a financial roadmap. It helps you compare actual results to expectations and identify when revenue, expenses, or margins are moving in the wrong direction.

Budgeting is especially useful for businesses with:

• Seasonal revenue
• Multiple locations
• Project-based work
• Inventory
• Staffing fluctuations
• Growth plans
• Tight margins

6.  Track Key Performance Indicators

KPI tracking helps business owners focus on the numbers that drive cash flow and profitability.

Depending on the business, useful KPIs may include:

Business Type	Helpful KPIs to Track
Contractors	Job profitability, labor cost, materials cost, project backlog, receivable days
Professional service firms	Billable hours, realization rate, client profitability, recurring revenue
Restaurants/hospitality	Food cost, labor cost, average ticket, occupancy, gross margin
Seasonal businesses	Peak-season revenue, off-season cash reserves, fixed costs, advance bookings
Self-employed individuals	Monthly net income, tax reserves, owner draws, recurring expenses

The goal is not to track every number—it is to track the numbers that help you make better decisions.

7.  Separate Business and Personal Spending

Mixing business and personal spending can make cash flow harder to understand and bookkeeping more time-consuming. It can also create issues during tax preparation.

Business owners should use separate bank accounts and credit cards for business activity whenever possible. Clean records make it easier to prepare tax-ready financials, evaluate profitability, and plan for cash needs.

What We Review in a Cash Flow Planning Session

A cash flow planning session is designed to help you understand your financial position and prepare for what is ahead. Depending on your business, we may review:

Bookkeeping and Financial Records

We look at whether your books are current, accurate, and useful for decision-making. If bookkeeping is behind or inconsistent, a cleanup may be recommended before building a detailed forecast.

Monthly Financial Statements

We review financial statements to identify trends, unusual expenses, margin issues, cash flow pressure points, and potential tax planning concerns.

Revenue and Expense Patterns

We evaluate how money comes in and goes out of the business, including seasonal trends, recurring expenses, vendor costs, payroll, debt payments, and owner draws.

Cash Flow Forecasting

We help estimate future cash inflows and outflows so you can plan for payroll, taxes, insurance, major purchases, slow seasons, and upcoming obligations.

Tax Planning and Estimated Taxes

We review whether tax payments are on track and whether cash should be reserved for upcoming federal tax, self-employment tax, payroll tax, or year-end planning needs.

Budgeting and KPI Tracking

We help identify practical metrics and budget targets so you can monitor performance during the year instead of waiting until tax season.

Advisory Recommendations

We discuss practical next steps, which may include improving bookkeeping processes, creating a monthly reporting package, adjusting estimated tax payments, building cash reserves, reviewing pricing, or scheduling ongoing advisory meetings.

How Cash Flow Planning Supports Better Decisions

Cash flow planning gives business owners better visibility. When your books are current and your numbers are reviewed regularly, you can make decisions with more confidence.

If you understand your cash flow…	You can make better decisions about…
When revenue is strongest or weakest	Building reserves for slower months
Which expenses are increasing	Pricing, cost control, and budgeting
Whether estimated taxes are on track	Tax reserves and payment timing
How much cash is available	Hiring, equipment purchases, debt reduction, or expansion
Whether customers are paying slowly	Collection processes and payment terms
Whether margins are shrinking	Pricing, staffing, inventory, and service mix

Cash flow planning is not just about avoiding problems. It is about creating a clearer path for growth, stability, and better financial decisions.

Schedule a Cash Flow Review in Naples, FL

If your business is profitable but cash still feels tight—or if you are unsure what the next few months will look like—it may be time for a cash flow review.

Our Naples, Florida team helps small business owners, self-employed individuals, contractors, professional service firms, restaurants, hospitality businesses, and seasonal businesses improve financial visibility and plan ahead.

Our services include bookkeeping, monthly financial statements, cash flow forecasting, tax planning, estimated tax review, budgeting, KPI tracking, and advisory services.

A proactive cash flow planning session can help you prepare for slow seasons, tax payments, storm-related disruptions, growth opportunities, and year-end decisions.

Contact our office to schedule a cash flow review or advisory meeting and gain a clearer picture of where your business stands.

Are Your Estimated Tax Payments on Track?

For many taxpayers, the biggest tax surprises do not happen because something went wrong in April. They happen because income, deductions, withholding, or business results changed during the year—and no one adjusted the tax plan along the way.

If you are a small business owner, self-employed professional, rental property owner, retiree with investment income, or individual whose income has changed, your estimated tax payments may need a fresh look before year-end. Waiting until tax season can leave you with a larger-than-expected balance due, possible underpayment penalties, and less time to make smart planning decisions.

A mid-year or quarterly estimated tax review can help you understand where you stand now, adjust payments if needed, and make better decisions for the rest of the year.

Why Estimated Tax Payments Matter

Estimated tax payments are generally used to pay tax throughout the year when enough tax is not being withheld from wages, retirement distributions, or other income sources.

They are especially important because tax obligations are not limited to April filing season. For many taxpayers, income is earned throughout the year, and taxes may need to be paid throughout the year as well.

Staying current with estimated payments can help you:

• Avoid a large surprise balance due when your return is prepared
• Reduce the risk of underpayment penalties
• Improve cash flow planning by spreading tax payments throughout the year
• Make better business and personal financial decisions before year-end
• Coordinate tax planning with retirement contributions, business purchases, investment activity, and other planning opportunities

Estimated tax planning is not just about paying the IRS. It is about knowing your numbers early enough to make informed decisions.

Who May Need to Pay Estimated Taxes?

Estimated tax payments may be important for taxpayers who receive income that is not fully covered by withholding. This often includes:

• Small business owners with pass-through income from an LLC, S corporation, partnership, or sole proprietorship
• Self-employed individuals and independent contractors
• Rental property owners with taxable rental income
• Retirees with pension, IRA, Social Security, brokerage, dividend, or capital gain income
• Investors with significant interest, dividends, capital gains, or sale transactions
• High-income earners whose withholding may not keep pace with total tax liability
• Individuals with changing income, such as bonuses, commissions, new jobs, job changes, or severance income
• Taxpayers with reduced withholding compared to prior years
• Business owners whose profits are higher than expected

Even if you made estimated payments last year, that does not automatically mean this year’s payments are still correct. A change in income, deductions, filing status, dependents, investments, or business profitability can quickly affect the amount you should be paying.

Common Reasons Estimated Payments Get Off Track

Estimated tax payments are often based on last year’s return, but last year may not reflect your current situation. Here are some of the most common reasons estimates become inaccurate.

1.   Business Income Increased

If your business is having a stronger year than expected, your prior-year estimates may be too low. This is a good problem to have—but it still needs planning.

Higher profit can mean:

• Higher income tax
• Additional self-employment tax for sole proprietors or partners
• Possible changes to retirement plan contribution opportunities
• A need to adjust cash reserves for tax payments

2.   Bookkeeping Is Behind or Incomplete

If your books are not current, it is difficult to know whether estimated tax payments are accurate. Unreconciled accounts, uncategorized expenses, or missing income can all distort your taxable income picture.

A bookkeeping review or bookkeeping cleanup can help produce more reliable numbers for estimated tax projections and year-end planning.

3.   Withholding Changed

Changes in employment, payroll setup, retirement distributions, or Form W-4 elections can affect how much tax is withheld during the year.

This is especially common when someone:

• Starts a new job
• Changes jobs
• Receives bonuses or commissions
• Begins taking retirement distributions
• Has both wage income and business income
• Reduces withholding without reviewing the full tax picture

4.   Investment Income Was Higher Than Expected

Retirees and investors may see tax changes due to:

• Capital gains
• Dividends
• Interest income
• Brokerage account activity
• Required minimum distributions
• Sale of stock, funds, real estate, or other investments

Investment income can be uneven from year to year, which makes periodic tax projections especially useful.

5.   Rental Property Results Changed

Rental property income can shift because of higher rents, vacancies, repairs, improvements, insurance changes, interest rates, or property sales.

Rental owners should review not only income and expenses, but also whether costs are being properly classified. Repairs, improvements, depreciation, and property-level tracking can all affect the tax picture.

6.   Major Life Events Occurred

Life changes often create tax changes. Examples include:

• Marriage or divorce
• Retirement
• Moving to Florida or changing residency
• Buying or selling a business
• Buying or selling real estate
• Receiving an inheritance
• Starting a side business
• Adding or losing dependents

A tax projection can help identify how these changes affect the current year before filing season arrives.

7.   Prior-Year Estimates Were Rolled Forward Without Review

Many taxpayers simply reuse the prior-year estimated payment amounts. That can work in some situations, but it can also create problems if the current year looks different.

A quarterly review helps confirm whether prior estimates are still reasonable—or whether they should be adjusted.

The Risks of Waiting Until Tax Season

By the time your tax return is being prepared, many planning opportunities have already passed. You may still be able to make certain retirement contributions or gather better documentation, but some strategies must be addressed before year-end.

Waiting until tax season can lead to:

• Unexpected balances due that strain cash flow
• Underpayment penalties if estimates or withholding were too low
• Missed planning opportunities before December 31
• Rushed decisions about retirement contributions, deductions, or business purchases
• Less accurate cash flow planning for business owners and retirees
• Higher stress during an already busy filing season

Tax preparation looks backward. Tax planning looks forward. The earlier you review your estimated tax position, the more options you typically have.

What a Mid-Year or Quarterly Estimated Tax Review Includes

An estimated tax review is designed to help you understand where you stand now—not months after the year is over. Depending on your situation, a review may include:

Income Review

We look at year-to-date income and projected income for the rest of the year, including:

• Business profit
• Wages and bonuses
• Self-employment income
• Rental income
• Retirement distributions
• Investment income
• Capital gains
• Other taxable income sources

Estimated Tax Projection

We prepare an updated tax projection based on current information. This helps estimate whether you are on track, overpaid, or potentially underpaid.

A projection may consider:

• Federal income tax
• Self-employment tax, if applicable
• Withholding already paid in
• Prior estimated tax payments
• Remaining estimated tax deadlines
• Expected year-end income and deductions

Bookkeeping Review

For business owners and rental property owners, reliable projections depend on reliable books. We may review whether your bookkeeping is current, complete, and properly categorized.

If issues are identified, a bookkeeping cleanup may be recommended before completing more detailed tax planning.

Cash Flow Planning

Tax payments affect cash flow. A review can help you plan for upcoming payments instead of being surprised later.

For business owners, this may include discussing:

• Monthly cash needs
• Owner draws or distributions
• Payroll and contractor costs
• Upcoming purchases
• Debt payments
• Tax reserves

Planning Opportunities

A tax projection can also help identify planning opportunities before year-end, such as:

• Adjusting estimated tax payments
• Increasing or modifying withholding
• Reviewing retirement plan contributions
• Timing income or expenses when appropriate
• Evaluating business purchases
• Reviewing entity structure or owner compensation
• Coordinating year-end planning decisions

Quarterly Advisory Meetings

For clients with changing income, ongoing business activity, or complex tax situations, quarterly advisory meetings can be especially valuable. These meetings help keep tax planning, bookkeeping, and cash flow planning connected throughout the year.

Signs You Should Schedule an Estimated Tax Review

You may benefit from an estimated tax review if any of the following apply:

• Your income is higher or lower than last year
• Your business is more profitable than expected
• Your bookkeeping is behind
• You started a new business or side business
• You sold investments, real estate, or business assets
• You own rental property
• You retired or began taking retirement distributions
• You received a large bonus, commission, or severance payment
• Your withholding changed
• You are unsure whether your quarterly payments are enough
• You were surprised by your tax balance due last year

If you are asking, “Are my estimates enough?” it is probably time to review them.

How Estimated Tax Planning Supports Better Decisions

Estimated tax planning is not only about avoiding penalties. It can also support better financial decisions throughout the year.

For example:

If you know your projected tax position…	You can make better decisions about…
Your business profit is higher than expected	Tax reserves, retirement contributions, owner pay, and equipment purchases
Your estimates are too low	Adjusting upcoming payments or withholding before year-end
Your books are incomplete	Scheduling bookkeeping cleanup before tax season
Your cash flow is tight	Planning payment timing and avoiding last-minute surprises
Your income changed significantly	Updating projections instead of relying on last year’s numbers

The goal is to replace guesswork with a clear plan.

Schedule an Estimated Tax Review in Naples, FL

If you are not sure whether your estimated tax payments are on track, now is the time to review them. Our Naples, Florida team helps small business owners, self-employed individuals, rental property owners, retirees, and individuals with changing income evaluate their tax position before year-end.

Our services include tax planning, estimated tax projections, bookkeeping review, cash flow planning, quarterly advisory meetings, and year-end planning.

A timely review can help you avoid surprises, plan for upcoming payments, and make smarter decisions before important year-end deadlines.

Contact our office to schedule an estimated tax review and find out whether your current payments are on track.

For many taxpayers, tax planning becomes a priority only when year-end is approaching—or worse, when it is time to file the return. But by then, some of the best planning opportunities may already be gone.

A mid-year tax checkup gives you a chance to look at where things stand while there is still time to make smart adjustments. Whether you own a small business, are self-employed, manage rental properties, or have experienced a change in income, reviewing your tax picture before the final months of the year can help reduce surprises, improve cash flow, and support better financial decisions.

For Naples-area business owners and individuals, this is especially important in a year where income, expenses, interest rates, insurance costs, payroll, and investment activity may look different than expected.

Why a Mid-Year Tax Checkup Matters

A mid-year review is not just about estimating what you may owe. It is about using the information available now to make informed decisions before deadlines limit your options.

1. You Still Have Time to Adjust Estimated Tax Payments

If you are self-employed, own a business, receive rental income, or have income that is not fully covered by withholding, estimated tax payments can be easy to miscalculate.

By reviewing your income and deductions mid-year, we can help determine whether your current payments are on track. If you are underpaying, there may still be time to adjust future payments and reduce the risk of a large balance due. If you are overpaying, you may be able to keep more cash available for your business or household needs.

2. Business Income May Not Be Tracking as Expected

Many small business owners start the year with one set of expectations, only to find that revenue, expenses, staffing, or margins have changed significantly by summer.
A mid-year tax planning review can help answer questions such as:

• Is the business more profitable than expected?
• Are expenses being categorized correctly?
• Are owner draws, payroll, or distributions being handled properly?
• Should we revisit cash flow expectations for the rest of the year?
• Are there upcoming purchases or investments that should be planned strategically?

The earlier these questions are reviewed, the more options you may have.

3. Bookkeeping Problems Are Easier to Fix Before Year-End

If your books are behind, incomplete, or inaccurate, waiting until tax season can create unnecessary stress and potentially higher cleanup costs.

A mid-year bookkeeping review can identify issues such as unreconciled accounts, misclassified expenses, duplicate transactions, personal expenses mixed with business expenses, or missing documentation. Addressing these problems now can make year-end reporting and tax preparation much smoother.
For businesses, clean books are also essential for making better decisions—not just filing a tax return.

4. Cash Flow Planning Becomes More Accurate

Tax planning and cash flow planning go hand in hand. A business may show a profit but still feel tight on cash because of debt payments, inventory purchases, equipment costs, payroll, taxes, or owner distributions.

A mid-year checkup can help you understand where cash is going and how future tax payments may affect liquidity. This is especially valuable for small business owners and self-employed individuals who need to plan for both business operations and personal tax obligations.

5. Waiting Until December Can Limit Your Options

Some tax strategies require action before year-end, and others require planning even earlier. If you wait until December, there may be less time to evaluate options, gather information, update books, or implement changes.

A mid-year review gives you time to plan thoughtfully rather than make rushed decisions at the end of the year.

Common Issues Found During a Mid-Year Review

A mid-year tax checkup often uncovers items that clients did not realize could affect their tax situation. Common findings include:

• Estimated tax payments that are too low or too high
• Business income that has increased significantly from the prior year
• Expenses that are miscategorized or missing from the books
• Bank or credit card accounts that have not been reconciled
• Personal and business transactions mixed together
• Rental property expenses that are not being tracked properly
• Payroll, owner draws, or distributions that need review
• Large equipment purchases or planned investments that need timing analysis
• Changes in filing status, dependents, withholding, or household income
• Prior-year tax surprises that have not been addressed for the current year

Finding these issues in the middle of the year gives you time to correct course.

Who Should Schedule a Mid-Year Tax Checkup?

A mid-year tax checkup can be valuable for many taxpayers, but it is especially helpful if you fall into one of the following categories.

Small Business Owners
If you own a business, your tax picture depends on more than annual revenue. Profitability, payroll, owner compensation, debt, entity structure, and bookkeeping accuracy can all affect your tax outcome.
A mid-year review helps determine whether your business is on track and whether additional tax planning or advisory support would be beneficial before year-end.

Self-Employed Individuals and Independent Contractors
Self-employed taxpayers often have variable income and limited withholding, which makes estimated tax planning especially important. Reviewing income and expenses mid-year can help reduce the risk of an unexpected tax bill.

Rental Property Owners
Rental real estate activity can create unique tax and cash flow considerations. Repairs, improvements, mortgage interest, insurance, property taxes, depreciation, and rental income should be tracked carefully throughout the year.
A mid-year checkup can help confirm that rental activity is being recorded properly and that you are prepared for tax season.

Individuals With Changing Income
You may benefit from a review if you have experienced or expect any of the following:

• A new job or job change
• A bonus, commission, or significant raise
• Stock sales or investment gains
• Retirement plan distributions
• Social Security or pension income changes
• A home sale or real estate transaction
• Marriage, divorce, or a dependent change
• A new business or side income

When income changes, withholding and estimated tax payments may need to change as well.

What We Review During a Mid-Year Tax Checkup

Our mid-year tax checkup is designed to give you a clearer picture of where you stand and what steps may make sense before year-end.

Depending on your situation, we may review:

• Year-to-date income and deductions
• Current federal tax withholding and estimated tax payments
• Business profit and loss activity
• Bookkeeping accuracy and cleanup needs
• Rental property income and expenses
• Cash flow trends and upcoming tax obligations
• Payroll, contractor payments, and owner compensation
• Planned equipment purchases or major expenses
• Retirement contribution opportunities
• Prior-year tax results and current-year projections
• Potential planning opportunities before year-end

The goal is to identify practical next steps—not overwhelm you with technical tax language. You will leave with a better understanding of your current tax position and what actions may help before deadlines arrive.

How This Connects to Year-End Planning

Mid-year planning and year-end planning work best together.
A mid-year checkup helps identify issues early. Year-end planning then allows us to refine projections, confirm remaining action items, and make final adjustments before December 31.

For many clients, this process may include:

• Updating bookkeeping records
• Adjusting estimated tax payments
• Reviewing cash flow needs
• Planning retirement contributions
• Evaluating business purchases
• Preparing for 1099 requirements
• Reviewing entity structure or owner compensation
• Scheduling advisory meetings for the next year

By starting earlier, you give yourself more time to make thoughtful financial decisions.

Do Not Wait Until Tax Season to Find Out Where You Stand Tax preparation reports what already happened. Tax planning helps you make decisions while there is still time to act.

If your income has changed, your business is growing, your books are behind, or you simply want to avoid another tax-time surprise, now is a smart time to schedule a mid-year tax checkup.

Our Naples, Florida firm works with small business owners, self-employed individuals, rental property owners, and individuals with changing income to provide tax planning, bookkeeping cleanup, estimated tax reviews, cash flow planning, and advisory services.

Schedule Your Mid-Year Tax Checkup

Before year-end planning deadlines approach, contact our office to schedule your mid-year tax checkup. We will help you review where you stand, identify potential issues, and create a practical plan for the remainder of the year.

Schedule your mid-year tax checkup today so you have time to plan—not just react.

For many Naples-area business owners, tax season is when bookkeeping issues come to the surface. A return can only be prepared accurately (and efficiently) when your records are complete, consistent, and “tax-ready.”

If your books are even slightly off during the year, it can snowball into higher tax preparation costs, missed deductions, delayed filing, and less confidence in your estimated tax payments and cash flow planning. The good news: most bookkeeping problems are fixable—especially when they’re caught before year-end.

Below are common bookkeeping red flags we see for small business owners, self-employed individuals, rental property owners, and closely held businesses—and what to do about them.

Why Bookkeeping Quality Matters for Tax Preparation and Tax Planning

Clean bookkeeping is not just about “getting the numbers in.” It’s the foundation for:

• Accurate tax returns (business and personal)
• Better tax planning throughout the year (not just in March or April)
• More reliable estimated tax reviews so you can avoid unpleasant surprises
• Clear financial statements that support lending, buying equipment, hiring, and growth decisions
• Cash flow planning based on reality—not guesswork

When bookkeeping is messy, tax preparation becomes a forensic project. When it’s clean, your CPA can focus on planning opportunities, not cleanup.

Bookkeeping Red Flags to Watch For

1. Bank and Credit Card Accounts Are Not Reconciled Monthly

If accounts are not reconciled, your reports may be missing transactions—or showing duplicates. This can distort income, expenses, loan balances, and owner distributions.
Why it matters at tax time: Unreconciled accounts often lead to extra back-and-forth, higher prep time, and increased risk of reporting errors.

2. Large “Ask My Accountant” or Uncategorized Balances

Uncategorized expenses, vague “miscellaneous” accounts, or large “suspense” balances are a sign that the books are not complete.
Why it matters at tax time: If expenses are not categorized correctly, you may miss deductions or end up with totals that don’t tie out to supporting documentation.

3. Personal and Business Transactions Are Mixed Together

This is one of the most common issues for closely held businesses and self-employed taxpayers—especially when multiple cards or accounts are used interchangeably.
Why it matters at tax time: Mixed transactions slow down tax prep, can create compliance risk, and make it harder to document legitimate business deductions.

4. Owner Pay, Draws, and Distributions Are Not Being Tracked Correctly

How an owner takes money out of the business matters, and the bookkeeping should reflect it clearly—especially for S corporations and partnerships.

Why it matters at tax time: Misclassified owner activity can create confusion, impact tax reporting, and make planning for future tax payments more difficult.

5. Payroll and Contractor Payments Don’t Match the Books

Payroll reports, payroll tax payments, and contractor payments should align with your accounting records.

Why it matters at tax time: Misalignment can cause errors in wage reporting, tax deductions, and year-end reporting—and can complicate W-2 and 1099 preparation.

6. You’re Using Your Accounting Software Like a Check Register

If your bookkeeping system isn’t set up to produce accurate financial statements—profit and loss, balance sheet, and clear expense detail—it’s hard to make informed decisions.

Why it matters at tax time: Tax returns rely on accurate totals and classifications. A “check register” approach often requires significant adjustments and cleanup.

7. Your Financial Statements Don’t Make Sense (or You Avoid Looking at Them)

If you can’t confidently answer basic questions—Are we profitable? Where is cash going? What did we pay contractors?—your books may not be reliable.
Why it matters at tax time: Unreliable statements lead to unreliable tax estimates. That can mean underpaying (and facing a large balance due) or overpaying (and straining cash flow).

8. Rental Property Activity Is Not Tracked by Property (or Not Tracked at All)

Rental property owners often track expenses “somewhere,” but not in a way that cleanly separates properties, repairs vs. improvements, or reimbursable items.

Why it matters at tax time: Poor rental bookkeeping can lead to missed deductions, inaccurate income reporting, and unnecessary delays during tax preparation.

9. You’re Behind—And Catch-Up Keeps Getting Pushed Off

If you’re two, three, or six months behind, the problem usually gets harder (and more expensive) to fix as time passes.

Why it matters at tax time: Catch-up work done under a deadline costs more, creates stress, and can limit tax planning options.

How Poor Bookkeeping Can Increase Tax Prep Costs (and Miss Deductions)

When bookkeeping is not tax-ready, tax preparation often requires:

• Reclassifying expenses to the correct tax categories
• Rebuilding income records from bank deposits
• Identifying duplicate entries and missing transactions
• Separating personal vs. business spending
• Cleaning up balance sheet items (loans, credit cards, equity, retained earnings)
• Requesting additional documentation and explanations

That extra time increases preparation fees and can still leave money on the table if deductions aren’t supported or aren’t captured in the books. Clean records also make it easier to identify planning opportunities—such as timing purchases, managing owner compensation, or adjusting estimated payments before year-end.

What a Bookkeeping Cleanup Typically Involves

A bookkeeping cleanup is designed to turn “messy books” into tax-ready financials. Depending on your situation, that may include:

• Reconciling bank and credit card accounts
• Reviewing and correcting account setup (chart of accounts)
• Cleaning up uncategorized and misclassified transactions
• Separating personal and business activity and documenting adjustments
• Reviewing payroll and contractor payments for proper classification
• Ensuring loan and credit card balances are accurate
• Producing clean monthly financial statements you can rely on

Once the books are cleaned up, many clients choose ongoing support through monthly accounting—so the problem doesn’t return next year.

The Best Time to Fix Bookkeeping Issues Is Before Tax Season

If you wait until tax documents arrive, you may feel forced into rushed decisions and last-minute cleanup. A proactive review allows time to:

• Get your books caught up
• Confirm you’re on track with estimated tax payments
• Improve cash flow planning for the remainder of the year
• Prepare confidently for 1099 preparation
• Use advisory support to make better business decisions before deadlines hit

Schedule a Bookkeeping Review or Cleanup (Naples, FL)

If you’re not sure whether your books are tax-ready—or you already know they’re behind—now is a great time to schedule a bookkeeping review. Our Naples, Florida team helps small business owners, self-employed individuals, and rental property owners with bookkeeping cleanup, monthly accounting, tax-ready financials, estimated tax review, cash flow planning, 1099 preparation, and ongoing advisory services.
To get started, contact our office to schedule a bookkeeping review or cleanup before tax season. The earlier we review your records, the more options you have—and the smoother tax time will be.

A Practical Note for Condo and HOA Residents: Understanding Association Financial Reporting

Helping Community Associations Stay Financially Prepared.

TAXPG’s affiliate resource for audit, review, and compilation support

Many of our clients live in condominium, HOA, or community associations throughout Southwest Florida, including the Naples/Fort Myers and Tampa/St. Petersburg areas. Because association finances affect assessments, reserves, insurance, capital projects, and long-term planning, we wanted to share a practical reminder about the importance of clear and timely financial reporting.

TAXPG is affiliated with Cukierski & Associates, a CPA firm with deep experience serving community associations. C&A provides audit, review, compilation, and related advisory services for condominium associations, homeowners associations, and other community association clients. You can also find Cukierski listed on our website as an affiliate resource for these services: Cukierski.cpa

Why Association Financial Reporting Matters

Community associations often have annual financial reporting responsibilities, and larger or more complex associations may benefit from additional CPA support. Depending on the association’s size, governing documents, lender or insurance requirements, board needs, and applicable state requirements, an association may need or choose to obtain services such as:

• Compiled financial statements to organize financial information in a formal CPA-prepared format
• Reviewed financial statements to provide limited assurance and additional analytical procedures
• Audited financial statements to provide a higher level of assurance over the association’s financial statements
• Advisory support for budgeting, reserves, internal controls, capital projects, and board financial questions

Because requirements can vary by association and should be verified based on the association’s specific facts, boards and property managers should review their governing documents and consult with qualified professionals before making financial reporting decisions.

Florida Statutory Financial Reporting Requirements (Condominium & HOA Associations)

If your association is located in Florida, state law generally ties the required type of annual financial report to the association’s total annual revenues.

Condominium associations (Fla. Stat. § 718.111(13))

Under Florida’s condominium statute, the annual financial reporting requirement generally depends on total annual revenues:

• Less than $150,000: Report of cash receipts and expenditures
• $150,000 or more but less than $300,000: Compiled financial statements
• At least $300,000 but less than $500,000: Reviewed financial statements
• $500,000 or more: Audited financial statements

Homeowners’ associations (Fla. Stat. § 720.303(7))

Under Florida’s HOA statute, the annual financial reporting requirement generally depends on total annual revenues:

• Less than $150,000: Report of cash receipts and expenditures
• $150,000 or more but less than $300,000: Compiled financial statements
• At least $300,000 but less than $500,000: Reviewed financial statements
• $500,000 or more: Audited financial statements

In addition, certain larger HOAs have additional requirements—for example, HOAs with at least 1,000 parcels require audited financial statements regardless of total annual revenues (Fla. Stat. § 720.303(7)).

Timing and delivery (Florida statutory timing framework)

Florida statutes generally require that the annual financial report (not to be confused with the audit/review/compilation report) be prepared/completed (or contracted for) within 90 days after fiscal year-end (or by the date provided in the bylaws), and that it be delivered to owners (or notice of availability provided) within 21 days after completion and no later than 120 days after fiscal year-end (or bylaw date) (Fla. Stat. § 718.111(13); Fla. Stat. § 720.303(7)).

A brief note on waivers / lower-level reporting

Florida law contains provisions that may allow, in certain situations, a properly approved waiver or a lower level of reporting. Because these rules can be technical and can vary based on association type, governing documents, and proper statutory approval procedures, boards and managers should confirm the applicable requirements with qualified legal professionals (Fla. Stat. § 718.111(13); Fla. Stat. § 720.303(7)).

Practical Checklist for Board Members and Association Residents

If you serve on a board, work with a property manager, or simply want to better understand your association’s financial health, the following questions may be useful:

• What type of financial reporting is our association required to obtain this year?
• Do our governing documents require an audit, review, or compilation?
• Are our annual revenues, reserves, or capital projects increasing in complexity?
• Do we have upcoming repair, maintenance, reserve, or insurance-related funding decisions?
• Are board members receiving financial statements that are clear, timely, and easy to understand?
• Would a CPA-prepared compilation, review, or audit help improve board confidence and transparency?
• Do we have appropriate financial controls over cash, assessments, vendor payments, and reserve funds?
• Would our property manager or board benefit from an outside CPA perspective before year-end?

When to Consider Additional CPA Support

An association may want to consult with a CPA firm if it is experiencing any of the following:

• Significant reserve or capital project planning
• Increased insurance scrutiny or financial documentation requests
• Rapidly rising assessments, repair costs, or operating expenses
• Board turnover or concerns about continuity of financial knowledge
• Questions from owners about transparency or financial reporting
• Uncertainty about whether an audit, review, or compilation is appropriate
• A desire to improve budgeting, internal controls, or long-term financial planning

TAXPG’s Affiliate Resource

For clients involved with a condominium, HOA, or community association, TAXPG can help connect you with Cukierski & Associates for community association audit, review, compilation, and advisory support. The goal is not to create unnecessary work for associations, but to help boards and property managers understand their options and make informed financial reporting decisions.

If you would like to learn more, please contact TAXPG at Melissa Propatier, or reach out directly to Cukierski & Associates at  847-496-7180. You may also visit our affiliate page here: Cukierski.cpa

Dear Valued Client,

Your tax return doesn’t have to be stressful.

Our team is ready to prepare your 2025 tax return, but we require your information no later than August 15^th, 2026 to ensure your return is completed and filed on time.

✔ Here’s What We Need

Please submit all of your tax documents by August 15, 2026, including any income statements, deductions, credits, or other tax-related information.

📂 How to Send Your Documents

Choose whichever option is most convenient for you:

🔒 Secure Client Portal

Upload your documents anytime through our secure portal.

📍 Office Drop-Off

875 94th Avenue N.

Naples, FL 34108

 

📧 Questions?

Not sure if a document is needed? Contact us—we’re happy to help.

Don’t Let a QR Code Cost You: How to Avoid the Latest IRS Scam

Scammers are constantly finding new ways to steal personal and financial information, and one of the latest tactics involves something many of us use every day: QR codes.

QR code can seem harmless, especially when it appears on what looks like an official IRS notice. But before you scan, it’s important to know that scammers are using fake IRS letters and fraudulent QR codes to direct taxpayers to websites designed to steal sensitive information.

How the Scam Works

You receive a letter that appears to come from the IRS. It may include official-looking logos, realistic formatting, and even a legitimate IRS phone number or website listed on the notice.

The catch? The QR code.

Instead of taking you to an official IRS webpage, the code may send you to a fake website that asks for personal information such as:

• Social Security numbers
• Bank account information
• IRS account login credentials
• PINs or passwords

Once this information is submitted, scammers can use it to commit identity theft or financial fraud.

Why This Scam Is So Convincing

QR codes have become part of everyday life, making them an easy target for scammers.

A fake IRS notice may appear completely legitimate at first glance. In some cases, even the website address or phone number printed on the letter may be accurate. The fraudulent QR code is often the only part of the notice designed to deceive you.
That’s why it’s important to verify before you scan.

How to Protect Yourself

If you receive an unexpected IRS notice, keep these tips in mind:

● Don’t scan QR codes on unexpected letters or notices.
● Go directly to IRS.gov by typing the address into your web browser.
● Never provide personal or financial information through links received from unsolicited emails, text messages, or social media.
● If you’re unsure whether a notice is legitimate, contact the IRS using information found on IRS.gov, not the information provided by a suspicious message or QR code.

Remember: The IRS Won’t Contact You This Way

The IRS does not initiate contact with taxpayers by email, text message, or social media to request personal or financial information. This includes requests for:

• Passwords
• PIN numbers
• Bank account information
• Credit card information
• Other sensitive financial details

If you receive a message asking for this information, it’s almost certainly a scam.

Stay Informed

Tax scams continue to evolve each year, making awareness one of your best defenses. The IRS publishes its annual Dirty Dozen list to help taxpayers recognize the most common scams targeting individuals and businesses.

Review the 2026 Dirty Dozen Tax Scams to learn more about the latest threats and how to protect yourself.

Staying cautious and taking a few extra moments to verify before clicking or scanning can help protect your identity, your finances, and your peace of mind. When in doubt, skip the QR code and go directly to IRS.gov.

The IRS may have wrongly charged you penalties during COVID. Get them refunded.

Which Tax Years Could Be Affected?

The issue may affect taxpayers with federal tax deadlines that fell during the COVID-19 disaster period, including certain deadlines related to 2019, 2020, 2021, and 2022 tax returns.
In general, the refund opportunity may be relevant for taxpayers who:

• Filed or paid after the original due date, but before July 10, 2023
• Were assessed late-filing penalties, late-payment penalties, estimated tax penalties, or certain interest during the COVID-19 disaster period
• Paid those penalties or interest and may now want to preserve a potential refund claim

Why July 10, 2026, Matters

The statute of limitations for refund claims is generally three years from the date a return was filed or two years from the date the tax was paid, whichever is later. For returns treated as filed by the postponed July 10, 2023, deadline, the three-year window may expire on July 10, 2026.

Taxpayers who believe they may have paid penalties or interest affected by the Kwong decision should consult their tax advisor as soon as possible. A protective claim may help keep the tax year open while the issue continues to be litigated.
In many cases, taxpayers may need to file Form 843, Claim for Refund and Request for Abatement, with the IRS. This form is generally paper filed, so taxpayers should allow enough time for preparation, mailing, and documentation before the July 10, 2026, deadline.

What Should Taxpayers Do Now?

Taxpayers who paid IRS penalties or interest connected to COVID-era filing or payment deadlines should consider taking the following steps:

• Review IRS account transcripts for 2019, 2020, 2021, and 2022
• Identify any penalties or interest assessed during the COVID-19 disaster period
• Determine whether payments were made before July 10, 2023
• Consult a tax advisor about whether a protective refund claim may be appropriate
• File any required claim before the applicable deadline

The opportunity is still developing, and refunds are not guaranteed. However, for taxpayers who paid significant penalties or interest during the pandemic period, the potential benefit may be worth reviewing before the July 10, 2026, deadline.
If you paid IRS penalties or interest related to COVID-era filing or payment deadlines, ML&R can help you evaluate whether a protective refund claim may be appropriate.

How Did This Issue Arise?

In late 2019, Congress enacted changes to Internal Revenue Code Section 7508A, which provided an automatic 60-day postponement for certain federal tax filing and payment deadlines following a federally declared disaster.
On January 20, 2020, the COVID-19 pandemic was declared a federal disaster. Because the original declaration did not include a formal end date, taxpayers have argued that certain federal tax deadlines were automatically postponed for the duration of the disaster period, plus an additional 60 days.

President Biden later ended the COVID-19 national emergency effective May 11, 2023. Under the reasoning in Kwong, that end date, plus the additional 60-day period, created a postponed deadline of July 10, 2023. In 2021, Congress amended the law to prevent this type of open-ended extension for future disasters, but that change applies prospectively and does not resolve the question for the COVID-19 disaster period.

As a result, some taxpayers and practitioners are arguing that the IRS should not have assessed certain interest or penalties on underpaid, late-paid, or late-filed taxes during that period.

Is the Kwong Decision Final?

No. The law remains unsettled, and the government is expected to continue challenging this position. Because the issue may take years to resolve through additional litigation or IRS guidance, taxpayers who may be affected should not assume refunds will be automatic.

However, waiting too long could cause taxpayers to lose the ability to file a claim. That is why many tax advisors are encouraging affected taxpayers to consider filing a protective refund claim before the applicable statute of limitations expires

Taxpayers should review IRS transcripts and payment records to determine whether a protective claim may be appropriate.