Many of the best tax moves for your business have to happen by December 31. Once the year ends, your options shrink. Here's what to review while there's still time to act.
Pull a profit and loss report for the year so far and estimate where you'll finish. You can't plan without knowing your numbers. Make sure your bank and credit card accounts are reconciled, and look for personal expenses mixed in with business ones.
If your business uses the cash method, you may have some control over which year income and expenses land in. Paying certain bills before December 31 or sending some invoices in January can shift taxes between years. Whether that helps depends on whether you expect to be in a higher or lower bracket next year.
Equipment, vehicles, and other assets may qualify for large first-year deductions through Section 179 or bonus depreciation. To count for 2026, an asset generally must be placed in service by December 31, not just ordered. Don't buy something only for the deduction, but if you already need it, the timing can matter.
Retirement plans are one of the most effective ways for owners to lower their taxable income. Deadlines vary by plan. Some 401(k) contributions have year-end deadlines, while a SEP IRA can generally be opened and funded up to your tax filing deadline, including extensions. Compare your options before the year ends so you don't miss one.
The fourth-quarter federal estimated tax payment for 2026 is due January 15, 2027. Compare what you've paid so far to what you expect to owe, including state tax. Catching a shortfall now can reduce a surprise bill and possible underpayment penalties.
The reporting threshold for contractors increased for payments made in 2026, from $600 to $2,000. Collect any missing Forms W-9 now, while contractors are easy to reach. Forms 1099-NEC and W-2 are generally due by February 1, 2027, since January 31 falls on a Sunday.
If your business has grown, an S corp election may reduce self-employment tax, though it adds payroll, a separate business return, and more paperwork. Owners must also pay themselves a reasonable salary. For most existing businesses, the election to start January 1, 2027 is due by March 15, 2027, but it's best to run the numbers before the new year.
Gather your mileage logs, home office details, asset purchases, loan statements, and receipts. Good records now mean a faster, more accurate return and fewer missed deductions.
I help small business owners plan ahead and head into tax season ready. See how I can help or book a free 30-minute call →
This article is for general informational purposes only and is not tax or legal advice. Tax rules change and every situation is different. Please consult a qualified professional about your specific circumstances.