For many small businesses, summer isn’t just a season – it’s the core of their operations. Whether you run an ice cream shop, offer landscaping services, or operate a tourism-focused venture, your busiest months bring concentrated income. Understanding how to manage this period from a tax perspective is crucial, not just for the summer, but for preparing smartly for the slower seasons ahead.
At Lightening the Load, we guide small business owners through every tax cycle. This blog post outlines strategies for seasonal businesses to make the most of their high-income months while proactively managing their tax burdens.
Maximize Summer Income (from a Tax Perspective)
During your peak season, your primary tax focus should be on accurate reporting and staying ahead of your tax obligations:
- Meticulous Income Tracking: Every sale, every service rendered, contributes to your business’s taxable income. Implement robust systems to meticulously track all income generated. This precision is fundamental for accurate tax reporting and avoiding discrepancies later.
- Sales Tax Compliance: If your business sells goods or services subject to sales tax, ensure you are diligently collecting and remitting these taxes. High sales volume means increased sales tax collections, which must be correctly reported and paid to the relevant tax authorities.
- Adjust Estimated Tax Payments: When your income surges during the summer, your overall tax liability for the year will likely increase. Proactively adjust your estimated tax payments upwards for the current tax quarter to avoid underpayment penalties. Waiting until the end of the year could result in a significant unexpected tax bill.
Minimize Tax Burdens (Year-Round Strategies for Seasonal Businesses)
Even during your busiest months, strategic tax moves can help reduce your overall tax burden:
- Accelerate Deductions: Consider making deductible business purchases or payments before the end of the tax year or during your peak income period. For instance, if you plan to buy new equipment (like a commercial ice cream machine or a heavy-duty lawnmower), doing so can allow you to claim depreciation deductions that offset your taxable income.
- Claim All Eligible Expenses: Keep detailed records of all business-related expenses. Common deductions for seasonal businesses can include:
- Seasonal labor wages and associated payroll taxes.
- Marketing and advertising costs incurred to attract summer customers.
- Costs of seasonal inventory or supplies.
- Maintenance and repair of equipment used heavily during peak months.
- Review Payroll Tax Withholding: If you hire seasonal staff, ensure you are correctly withholding and remitting payroll taxes (Social Security, Medicare, federal unemployment, state unemployment). Proper handling of these employer and employee tax obligations is critical.
- Explore Business-Specific Tax Credits: Research any tax credits relevant to your business or industry. For example, some states offer credits for certain types of seasonal employment or for energy-efficient upgrades to your business property.
Rob’s weekly tax tip – Timing of Income and Expenses
“Accelerating deductions or deferring income can have a large impact on your tax bill for the year.
If you had a great Q1 and Q2 in terms of sales and are thinking your profits will rise this year – and as a result, that your tax liability will also rise – it may be a good move to accelerate some of next year’s inventory purchases to this year.
Most businesses file taxes on a “cash basis” meaning expenses are deductible for taxes when they are actually paid in cash. Purchasing your next 2026’s Q1 inventory and then settling the invoice in cash in this 2025’s Q4, will allow you to offset the increase in profits from earlier this year.
This same principle applies to sales – though in the opposite direction. Again, if you had a great Q1 and Q2 this year, you may think about delaying sending invoices until early 2026 for Q4 sales. This will defer the cash payments to next year at a potential lower tax rate.”
— Rob Burgess, CPA
Preparing for Slower Seasons (Tax-Focused)
The quiet months are prime time for tax planning and review:
- Project Taxable Income: Use your peak season data to project your overall annual taxable income. This helps in refining your remaining estimated tax payments.
- Organize Tax Documents: Use the slower period to thoroughly organize all your income and expense records. This ensures everything is in order for year-end tax preparation.
- Consult a Tax Professional: Engage with a tax professional during your off-season. They can help you review your year-to-date tax picture, identify overlooked deductions or credits, and plan for any significant purchases or changes before the tax year closes.
Strategic Tax Management for Seasonal Success
Operating a seasonal business presents unique tax challenges, but with proactive planning and diligent record-keeping, you can effectively manage your tax obligations throughout the year. By taking strategic steps during both busy and slow periods, you can optimize your tax position.
At Lightening the Load, we’re here to support your seasonal business with expert tax advice and personalized solutions. Let us help you navigate your unique tax cycle.
Let us lighten your load.
