Q4 is Here! It’s Never Too Late to Start Preparing for Tax Season

As a pool care business owner, you’re likely focused on keeping your customers’ pools sparkling clean and well-maintained. Maybe you’re just focused on getting thru your day. However, there’s another crucial aspect of running your business that requires year-round attention: Taxes.

With the 2025 tax season just seven months away, it’s never too late to start preparing, even if you haven’t given it much thought until now. In this article, we’ll explore some essential steps you can take to get your finances in order and avoid being caught off guard when it’s time to file.

1. Create a Tax Savings Account: If you’re a sole proprietor or LLC owner, one of the most important steps you can take is to create a dedicated tax savings account. QuickBooks Checking offers Savings Envelopes. Some banks call them buckets. Wherever you do your banking open up a savings account and start transferring 25% of your income into this account regularly. This practice will help ensure you have funds available when it’s time to pay your taxes, reducing the stress and potential financial strain come tax season. If you are structured as an LLC taxed as an S Corp, you will want to consult with your accountant on how much you need to be setting aside for taxes. Check out my article on the different bank accounts every business owner should have.
2. Schedule a Meeting with Your Accountant: Don’t wait until the last minute to consult with your accountant. Schedule a meeting as soon as possible to review your books and get an estimate of what you might owe in taxes. This early assessment will give you time to make any necessary adjustments to your finances and avoid surprises later.
3. Organize Your Financial Records: Start gathering and organizing all your financial records, including receipts, invoices, and bank statements. Having well-organized documentation will make it easier to claim deductions and credits, potentially reducing your tax liability. If you do not have accounting software now is the time! Make a plan to sign up for QuickBooks and get your business on the right path starting in Q1 next year.
4. Review Your Expenses: This should be number 1. I have already started looking at my budget I created for 2024 and doing a major reset for both my business and my personal finances. Take a close look at your business expenses. Are there any areas where you can cut costs? Conversely, are there any tax-deductible expenses you should consider making before the end of the year? Understanding your expenses can help you make informed decisions that could impact your tax situation. You should already be experiencing a decrease in your cost of goods starting at the end of Q3 and into Q4. My expenses decreased 28% in September 2024 from August. This is mainly the chemicals used on my weekly pool care routes. Here is a good article on paying attention to your expenses.
5. Consider Making Estimated Tax Payments: This is something you need to discuss with your accountant. If you haven’t been making quarterly estimated tax payments, now might be a good time to start. This can help you avoid penalties for underpayment and spread out your tax burden throughout the year. I do not make estimated tax payments. I talk with my accountant throughout the year and we have a good handle on what my tax situation is at any given point in the year.
6. Explore Tax-Advantaged Retirement Accounts: Look into opening or contributing to tax-advantaged retirement accounts, such as a SEP IRA or Solo 401(k). These accounts can help reduce your taxable income while also securing your financial future. Again, check in with your accountant for recommendations and do your own homework when it comes to investing.
7. Stay Informed About Tax Law Changes: Tax laws can change from year to year. Stay informed about any new regulations or deductions that might affect your pool care business in your state. Your accountant can be a valuable resource for this information.
8. Implement a Better Bookkeeping System: If you’ve been struggling with your bookkeeping, now is the time to implement a more efficient system. Consider using accounting software designed for small businesses to help you track income and expenses more accurately. Be sure your accountant can support and utilize whatever you choose for your bookkeeping and accounting software. My accountant has access to my QuickBooks and is able to review &/or make changes quickly when needed.
9. Plan for Growth and Its Tax Implications: If your pool care business has experienced significant growth this year, or if you’re planning for expansion, consider how this might affect your tax situation. You may need to adjust your tax strategy accordingly.
10. Don’t Forget About Local Taxes: In addition to federal taxes, make sure you’re up to date on any state or local tax obligations specific to your pool care business especially your sales tax. Here in Texas Pool Care is taxable and I must collect sales tax on my pool care services.

Conclusion: While the 2025 tax season may seem far away, taking proactive steps now can save you time, money, and stress. By creating a tax savings account, consulting with your accountant, organizing your finances, and staying informed about tax laws, you’ll be well-prepared and well-funded when it’s time to file. Remember, it’s never too late to start planning for tax season or planning in general for a profitable end to 2024 and a successful start to 2025 – your future self (and your pool care business) will thank you!