Quick summary (for busy founders)
- January is filing month, not planning month. W-2s, 1099-NECs, and many employer filings are due January 31—meaning your prep must be done in November–December.
- Cash hits fast: Q4 estimated taxes are due January 15 for many individuals/owners. C-corps on a calendar year often face a December 15 estimated payment. Plan cash now, not later.
- Benefits & comp decisions are year-end sensitive. Solo 401(k)/company plan setup, bonus accruals (the “2½-month rule”), and payroll elections live in Nov–Dec.
- Compliance stacks: FUTA Form 940, ACA reporting for ALEs, and state filings crowd Q1. Your December close is your launchpad.
- CleverProfits can own the chaos – bookkeeping close, filings, 1099/W-2 workflows, cash-flow calendars, and a Q1 attack plan tied to your growth targets.
Why founders get burned in January (and how to avoid it)
January feels far away in November. Then the clock flips, Slack is on fire, and you’re suddenly “prioritizing” a dozen immovable deadlines. The fix isn’t heroic energy; it’s calendar math and front-loading.
Think of Nov – Dec as your Q1 pre-season: you install the playbook, test the gear, and set your starting lineup. When the whistle blows in January, you’re executing—not scrambling.
CleverProfits POV: We treat November as your Operational Year-End Sprint. Accounting, payroll, tax, and CFO planning sync into one checklist so nothing slips between New Year’s confetti and January due dates.
The Nov–Dec “Q1 Readiness” Checklist
1) Lock your people data: W-2s, 1099-NEC, and payroll reconciliations
Why now: W-2s and 1099-NECs must be filed with agencies and furnished to workers by January 31. Reconcile payroll, addresses, legal names, SSNs/EINs, and total comp before holiday out-of-office starts.
Do this in November – December:
- Reconcile gross-to-net by employee and by general ledger.
- Verify worker classifications (employee vs. contractor) and collect missing W-9s.
- Identify contractors paid >$600 for 1099-NEC.
- Queue e-file accounts (SSA BSO, IRS e-services) and test SFTP/e-file credentials.
- Freeze changes one payroll before year-end to stabilize W-2 totals.
Where CleverProfits helps: We run the year-end payroll audit, prep W-2/W-3 and 1099 lists, and file. Your team reviews once: no midnight spreadsheets.
2) Map your cash: January tax outflows sneak up fast
Why now: Many owners owe Q4 estimated taxes by Jan 15; missing or underpaying can trigger penalties. Also refresh your sales tax, payroll tax, and any year-end corporate estimates (C-corps commonly pay an instalment mid-December).
Do this in November – December:
- Build a 13-week cash forecast that includes Jan 15 estimates, Jan 31 filings, vendor prepayments, and annual renewals.
- Review safe harbor strategies to avoid underpayment penalties (e.g., prior-year % paid in). Rising interest rates made penalties sting.
- If you’re a calendar-year C-corp, confirm the Dec 15 estimate and compute early.
Where CleverProfits helps: We slot all tax and payroll outflows into your rolling cash model, then coordinate payment approvals so January doesn’t choke your runway.
3) Decide benefits and retirement moves while the window is open
Why now: Plan setup and employee deferral elections often hinge on year-end timing. The SECURE Acts expanded flexibility, but parts still require Dec 31 action to maximize contributions.
Do this in November – December:
- Solo 401(k)/401(k): Ensure plan established on time; employee deferral elections are typically by Dec 31 (especially for W-2). Employer contributions can often wait until the return due date (plus extension).
- HSA/FSA elections: finalize and communicate.
- Owner comp strategy: finalize W-2 comp for S-corp owners and year-end profit distributions with tax planning baked in.
Where CleverProfits helps: We coordinate with payroll/TPAs, draft the owner comp play, and ensure your deferrals and employer contributions are documented and scheduled.
4) Accrue bonuses correctly (so you actually get the deduction)
Why now: If you’re accrual-basis and want the deduction for this tax year, bonuses typically must be fixed and determinable by year-end and paid within 2½ months after year-end. Cue documentation.
Do this in November – December:
- Draft board/manager approvals, bonus formulas, and eligibility lists.
- Confirm payment date (by March 15 for calendar-year companies to fit the 2½-month window).
- Align with cash forecast and owner tax planning.
Where CleverProfits helps: We design the bonus accrual memo, tie it to your GL, and model tax vs. cash timing so you can be generous and smart.
5) Close the books early and clean (December close is your Q1 springboard)
Why now: Accurate December financials power everything: budgets, lender updates, tax returns, board decks, and hiring plans.
Do this in November – December:
- Hard close Nov, soft-close Dec plan, and pre-reconcile bank/credit cards, AP/AR, inventory, and fixed assets.
- Review depreciation choices (Section 179 vs. bonus vs. MACRS), asset placements in service by Dec 31, and capitalization policy.
- Prep audit-ready files for your CPA: trial balance, lead sheets, schedules.
Where CleverProfits helps: Our accounting team runs your year-end close, and our tax team aligns elections so your tax depreciation and book depreciation play nicely with lenders and investors.
6) Put ACA and employer filings on rails
If you’re an Applicable Large Employer (ALE), you’ll be furnishing/filing 1094-C/1095-C in Q1. Build timelines now; vendor slippage in January is common.
Also remember Form 940 (FUTA) lands in Q1 for most employers—another reason to prepare payroll totals and state info by year-end.
Heads-up on dates: Furnishing deadlines for ACA forms often land around early March when the standard date falls on a weekend/holiday; watch the year’s specific calendar.
Where CleverProfits helps: We manage the ACA data pulls, vendor coordination, and Form 940 prep as part of a unified Q1 calendar.
7) Budget, plan, and price like a grown-up brand (because you are)
Why now: Your Q1 budget is where strategy meets math. Prices, headcount, CAC/LTV assumptions, and gross margin targets all need a January-ready plan—with a buffer for reality.
Do this in November – December:
- Lock an operating plan: revenue model, hiring plan, COGS, opex, and capital spend.
- Run what-ifs: recession wobble, ad cost spikes, top-customer churn.
- Align go-to-market (pricing, offers) with unit economics and tax capacity (e.g., when to accelerate or defer expenses).
Where CleverProfits helps: Our fractional CFOs build the driver-based model, pressure-test assumptions, and convert it into monthly dashboards you’ll actually use.
A founder-friendly Q1 calendar (pin this)
- Dec 1–15: Final payroll audit; contractor/W-9 sweep; cash-flow forecast with Dec 15 C-corp estimate if applicable.
- Dec 16–31: Lock employee addresses/titles/comp; approve bonus plan and accrual; set year-end retirement plan elections; place assets in service; soft-close December.
- Jan 1–15: Cut Q4 estimated taxes (owners/individuals); finalize December close; generate 1099/W-2 drafts for review.
- Jan 16–31: File and furnish W-2s and 1099-NECs; prep and file Form 940; kick off ACA data sets if applicable.
Common January “gotchas” (and how we neutralize them)
- Contractor with no W-9 → TIN mismatch & 1099 delays
Fix: Collect W-9s before the last payment; hold payment if needed. We run an auto-chase workflow in December. - Owner forgot Q4 estimates → Penalties + cash crunch
Fix: We use a traffic-light cash board that flags Jan 15/31 outflows with approvals a week prior. - W-2 address errors → Reissues & angry Slacks
Fix: HRIS/Payroll address attestations in early December; freeze file one payroll before year-end. - Bonus plan not “fixed” → No deduction this year
Fix: Board/manager approval memo and recipient list before Dec 31; payment scheduled by March 15 if calendar year. - 401(k) confusion → Missed deferrals or plan setup
Fix: Decide by early December; for W-2 staff, ensure deferral elections by Dec 31; document employer contribution policy for post-year funding.
How CleverProfits plugs every leak (so you can sleep)
- Fractional CFO: Cash-flow and Q1 calendar orchestration, driver-based budgets, pricing strategy, and board-ready reporting.
- Accounting & Bookkeeping: Year-end close, W-2/1099 data hygiene, reconciliations, fixed-asset rollforwards, and audit-ready workpapers.
- Tax Planning & Filing: Estimates, elections, bonus accrual guidance, 940/ACA coordination, and return prep.
FAQ’s
Why is November – December so critical for Q1?
Because January 31 is the hard deadline for W-2s and 1099-NECs, and January 15 hits many owners with estimated taxes. Prep and cash planning must happen before the holidays.
What are the big January federal forms for employers?
W-2/W-3, 1099-NEC, and Form 940 (FUTA), among others. ACA forms 1094-C/1095-C also kick off for large employers.
I’m accrual-basis – how do I deduct bonuses for this year?
Generally: fix the liability by Dec 31 and pay within 2½ months after year-end (calendar-year companies: by March 15). Document the plan.
Do I still have time to set up a Solo 401(k)?
Often yes, but the details vary. Plan setup and employee deferral elections tend to be year-end sensitive; employer contributions can often be made by the return due date (plus extension).
What happens if I miss Q4 estimates?
You may face underpayment penalties, which have grown more painful with higher interest rates. We use safe-harbor planning and cash calendars to avoid this.
Make January boring (the good kind)
Want a January that feels… calm? Let our fractional CFO, accounting, and tax teams turn November–December into a clean launch pad: airtight payroll and 1099s, a cash-flow calendar that anticipates every hit, and a Q1 budget you actually believe in.
Book a call with CleverProfits and we’ll run the playbook for you.
The Clever Writing Team
The CleverProfits writing team includes various team members in Advisory, Financial Strategy, Tax, and Leadership. Our goal is to provide relevant and easy-to-understand financial content to help founders and business leaders reach their true potential.
TABLE OF CONTENTS
- 1099 vs W-2 classification, 1099-NEC deadline, ACA 1095-C reporting, bonus accrual 2.5-month rule, budget planning, e-file W-2, Form 940 FUTA, fractional CFO services, January 15 estimated payment, January 31 filing deadline, owner compensation strategy, payroll year-end checklist, Q1 planning, Q4 estimated taxes, small business tax deadlines, Solo 401(k) year-end Related intents: cash-flow forecasting, tax penalty safe harbor, W-2 deadline, year-end tax planning
