A number of uncertainties limit the ability of business owners, executives, and employees to effectively plan for the future. Although we are generally restricted to a "big picture" vision of what is to come, we can focus on the details of today and use them to create effective year-end planning strategies.

The key to year-end planning is to empower yourself with the most important tool: an intimate understanding of your current financial situation. Don't allow yourself to be surprised by events that are easily within your control, and make sure you have all the necessary information on hand in case you are faced with an unforeseeable event.

Income can come in various forms, and you need to understand the taxability of your income and the ramifications that unexpected income might have on your overall finances.

Work with your accountant to understand the immediate tax implications of a year-end bonus or excess year-end distributions from a tax-deferred account. If you haven't already, use this as an opportunity to estimate future earnings and set goals for next year's taxable income.

Investors also should have firm knowledge of their year-to-date capital gains. If you invest in mutual funds, expect that they will be paying a capital gain distribution. Each mutual fund company will announce its estimated capital gains and when it will pay them. Calculate the amount of unrealized capital loss in your accounts and evaluate the costs and benefits of liquidating positions to help cover some of your realized capital gains.

There are ways you can shelter earned income at the 11th hour, but you'll need to know what tax-deferred investment vehicles are available. The most common of these investment vehicles for employees are IRAs and company-sponsored retirement accounts. Making a contribution to an IRA is a great way to reduce your taxable income in a given year, but you must make sure that your contributions are fully tax deductible.

In 2012, you can make a combined contribution to any IRA of up to $5,000, or $6,000 if you are age 50 or older. If either you or your spouse is covered by a tax-deferred retirement account at work and if your income exceeds certain levels, the ability to deduct some of your contribution might be limited.

Also, if you're an employee, and you have an employer-sponsored retirement plan, you need to understand it. First, know if your plan will accept lump-sum contributions at year-end. This is an effective tool for deferring taxes on large bonuses or unexpected income.

Due to the higher contribution limits on employer-sponsored retirement plans—$17,000, or $22,500 for those over 50—and the possible tax-deductibility concerns with traditional IRA contributions, this is a great option for year-end contributions if they're allowed.

Second, see if in-service rollovers are available. An in-service rollover allows you to move funds from your employer-sponsored plan into a traditional IRA while still employed. This is an excellent tool for those who are considering a Roth conversion and don't have other significant traditional IRA assets. The details of your employer-sponsored retirement plan can be found in the summary plan description that is sent to participants annually. The plan description also will be available on the retirement plan website, or you can request a copy from your plan representative.

Business exec-utives often look to executive perks and awards to generate additional funds for their households during the holiday season. However, they need to be careful not to invoke unintentional in-come at year-end by exercising nonqualified stock options, prematurely selling incentive stock options or allowing restricted stock units to vest unexpectedly.

Exercising non-qualified stock options is a taxable event. You will be required to pay income taxes on the difference between the option grant price and the exercise price. Income taxes can also be realized if an incentive stock option is sold within two years from the grant date or one year from the exercise date, whichever is later. All or some of your gain may be taxed as ordinary income rather than at traditional capital gains rates.

Today, as an incentive, many executives receive restricted stock units, though most have a limited understanding of how these vehicles work. RSUs behave much like traditional stock options, as their value will increase or decrease with the value of the underlying stock over time.

The main concern with RSUs is that when they vest, they are taxable as income in that calendar year. This is a great opportunity for those who aren't fully funding their employer-sponsored retirement plan to make a year-end lump-sum contribution and shelter part or all of the distribution from income taxation. Don't let RSUs surprise you. Always keep a running total of the number of RSU shares that will vest in a given year.

There also are year-end strategies that can help those with lower-than-normal income levels or higher-than-normal deductions. Consider the option of a Roth conversion. A Roth conversion allows you to move money out of your traditional IRA, assuming income tax on the conversion today, and into a Roth IRA, where funds will grow tax-exempt.

This strategy is useful only if you believe your current income tax rate is lower than your tax rate will be when you plan to take distributions from the tax-deferred retirement accounts.

Business owners need to be transparent with their employees in regard to year-end bonuses, and any additional income that might be directed toward their employees. This will afford the employees the opportunity to consult their financial services professionals.

Remember, knowledge is power when it comes to year-end planning.