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What You’ll Regret Not Doing Before December 31
A Q4 Reality Check for Law Firm Owners
If you’re waiting until January to start thinking about taxes… you’ve already cost your future self money.
Every December, I hear from attorneys who wish they’d moved sooner—who assumed they had more time, or didn’t realize what options they were about to lose. And once that calendar flips, the IRS doesn’t care that you were “too busy.”
So let’s walk through it now.
These are the most common regrets law firm owners face every year—regrets you still have time to avoid.
1. Not Meeting With a CPA Who Knows Your Business
Your generalist tax preparer might be great with forms—but law firms require more than forms.
From trust accounting rules to owner compensation strategy, your business model has unique risks and tax opportunities. And if your CPA isn’t proactively helping you plan before December 31, you’re not getting what you pay for.
What you’ll regret:
Waiting until tax season to realize you overpaid quarterly taxes, missed write-offs, or didn’t structure bonuses and draws strategically.
2. Forgetting That Deductions Happen When Money Moves
You can’t deduct what you don’t spend. Period.
Deductions like equipment upgrades, professional development, and marketing investments only count if they happen before year-end. Promising to spend “in Q1” doesn’t help your 2025 tax return.
And if your books are messy? You may not even know what’s still deductible.
What you’ll regret:
Losing thousands in tax savings because your timing was off—or because you didn’t know what you were eligible to deduct.
3. Ignoring Owner Compensation and Retirement Planning
There’s a reason we say tax planning is not tax prep.
Tax prep happens after the fact. Planning happens now—while there’s still time to:
- Max out a Solo 401(k) or SEP IRA contribution
- Adjust your W-2 wages if you’re an S Corp
- Distribute cash draws strategically across 2025
- Use year-end bonuses to boost morale and reduce liability
What you’ll regret:
Not optimizing your owner pay structure—and scrambling to make retroactive moves you’re not eligible for.
4. Overlooking Your Trust Account Reconciliations
Let’s be clear: this isn’t just about taxes. It’s about compliance.
By now, your IOLTA or client trust account should be fully reconciled through October—and you should be prepping final reports for the year.
If you’re behind, you’re already out of compliance in many states.
What you’ll regret:
Facing an audit with incomplete records—or worse, discovering unreconciled client funds you can’t account for.
5. Waiting for Clarity Instead of Creating It
Lawyers often tell themselves they need “more time” or “more clarity” before they make big decisions—about hiring, software, strategy, or investments.
But clarity doesn’t show up in Q1 unless you create it now.
A proper year-end review can tell you:
- If your pricing is aligned with your cost structure
- Whether you can afford a new hire or office expansion
- Where cash is leaking from your business
- What tax strategies you’re eligible for (before they expire)
What you’ll regret:
Making decisions in the dark—and realizing too late that you could’ve set yourself up for a stronger Q1.
Here’s the Truth: December 31 Is a Deadline, Not a Goal
This isn’t just about saving money. It’s about confidence.
About knowing that you’ve done everything you can to protect your profit, minimize your liability, and start 2026 strong.
And if you haven’t already done these things? You’re not too late—but you’re close.
✅ Here’s What to Do Next
At Prestige Accounting & Consulting, we help law firm owners like you build tax strategies that fit your firm, your goals, and your unique challenges.
From year-end deductions to owner draws to IOLTA compliance, our job is to help you wrap up 2025 without regrets.
Let’s make your year-end count—for your future self, your team, and your clients.
