Mid-Year Tax Tune-Up: A Colorado Checklist for Small Businesses

As summer settles over Colorado, it’s the perfect time for small business owners to pause, reflect, and fine-tune their financial strategy. A mid-year tax tune-up helps you catch issues early, reduce penalties, and position your business for stronger year-end results.

Below is your Colorado-specific mid-year checklist—practical steps to ensure your books, tax strategy, and cash flow are all aligned for success.

1. Update Your Projections

How are you tracking against your goals for 2025?

• Re-evaluate your revenue, expenses, and profit based on the first six months.

• Adjust estimated tax payments if profits or sales are higher (or lower) than planned.

• Consider how growth, new employees, or equipment purchases may shift your tax position.

💡 Tip: A mid-year forecast meeting can identify savings opportunities—like deferring income or accelerating deductions—months before it’s too late to act.

2. Review Estimated Tax Payments & Deadlines

Under - or over -paying estimated taxes can cause unnecessary cash strain or penalties.

• Confirm you’ve made both federal and Colorado quarterly payments on time.

• Adjust Q3 and Q4 estimates if business performance has changed.

• Verify that your payments reflect both business and personal income obligations if you’re a pass-through entity.

💡 Tip: Set calendar reminders for remaining 2025 payment due dates and automate payments when possible to avoid missed deadlines and interest charges.

3. Clean Up Your Books and Records

Mid-year is the perfect time to correct mistakes before they multiply.

• Reconcile bank, credit-card, and loan accounts through June 30.

• Review expense categories and correct any misclassified transactions.

• Update depreciation schedules and ensure fixed-asset records are accurate.

💡 Tip: Schedule a short “bookkeeping audit” each July—it’s far easier to fix errors now than during tax season when every hour counts.

4. Review Structure, Deductions & Credits

Tax rules shift, and your entity structure should evolve with your business.

• Review eligibility for the 20% Qualified Business Income (QBI) deduction.

• Re-assess if your LLC or S-Corp structure still offers the best tax outcome.

• Explore credits for hiring, energy-efficient upgrades, or R&D activities available in Colorado.

💡 Tip: A mid-year consultation with an accountant can reveal structure changes that might save thousands at year-end. Don’t wait until December to explore options.

5. Sales Tax & State Filing Considerations

Colorado’s patchwork of local sales taxes can trip up even seasoned business owners.

• Verify you’re filing in all required cities and counties (Castle Rock, Douglas County, Denver Metro, etc.).

• Review nexus exposure if you’ve started selling to other states or online.

• Confirm exemption certificates are up-to-date for any resale transactions.

💡 Tip: Use the Colorado Department of Revenue’s Sales Tax System (SUTS) to simplify multi-jurisdiction filings—one overlooked locality can result in costly back payments and penalties.

6. Payroll & Employment Tax Review

Your payroll system deserves a check-up too.

• Confirm employee classifications and update any 1099 vs. W-2 status changes.

• Audit year-to-date withholdings for accuracy.

• Evaluate benefit offerings for tax advantages, such as 401(k) or HSA contributions.

💡 Tip: If you use payroll software, download and review your mid-year reports. Spotting a mis-coded deduction or missed benefit contribution now can prevent expensive year-end corrections.

7. Cash Flow & Tax-Payment Strategy

Healthy cash flow is the foundation of good tax strategy.

• Forecast your cash needs for Q3 and Q4, accounting for estimated payments, major purchases, or seasonal dips.

• Maintain a separate tax savings account so funds are always available.

• Revisit financing or credit options before year-end if expansion is on the horizon.

💡 Tip: Treat tax savings like an operating expense—set aside a fixed percentage of revenue each month so you’re never caught short when payments are due.

8. Meet with Your Trusted Advisor

Tax planning isn’t a once-a-year task—it’s an ongoing conversation.

• Bring your financials, projections, and questions to a mid-year strategy session.

• Discuss deferral opportunities, retirement planning, and Colorado-specific credits.

• Develop an action plan that extends through year-end and beyond.

💡 Tip: The best tax outcomes come from proactive planning—not reactionary filing. A single mid-year conversation can uncover strategies you might otherwise miss.

Why This Matters More Than Ever

Ignoring your mid-year tax tune-up can be expensive. Missed estimated payments, outdated entity structures, or bookkeeping errors often result in penalties, higher tax bills, and avoidable stress. On the flip side, small business owners who plan ahead uncover cash-flow advantages, new deductions, and opportunities for growth that others overlook.

At Hiatt Accounting Group, we help Colorado business owners stay ahead of these issues so you can focus on what matters most—running your business and growing your revenue. Our proactive approach means you’ll never be caught off-guard by year-end surprises.

Ready to schedule your Mid-Year Tax Tune-Up?
Let’s make the second half of 2025 your most profitable yet.

Call or text us: (720) 595-9473
Email: ahiatt@hiattaccountinggroup.com
Visit: www.hiattaccountinggroup.com