Tax Season Is Over. Tax Planning Isn't. 👀
5 Things Business Owners Should Review Before December 31
We made it through another October 15 tax deadline! 🎉
But just because tax season is officially behind us doesn't mean it's time to stop thinking about taxes.
In fact, the last few months of the year can be some of the most important for tax planning.
Here's a question I want every business owner to consider:
Do you know what your 2026 tax bill is going to look like?
Not what you paid last year. Not what you hope you'll owe. What your actual numbers are telling you right now.
Because once December 31 passes, many tax-saving opportunities disappear with it.
And I'd much rather help you make informed decisions now than deliver an unpleasant surprise in April.
1. Do You Know How Much Money Your Business Actually Made?
I'm not talking about how much money is sitting in your bank account.
I'm talking about your business's actual profit.
There's a difference, and it's one that catches a lot of business owners off guard.
You might have plenty of cash in the bank but still have a significant tax liability. Or you might have a profitable business on paper while struggling to cover your monthly expenses.
That's why having accurate, up-to-date bookkeeping matters.
Before year-end, take a look at your profit and loss statement, review your expenses, and make sure your accounts are reconciled.
If your books aren't current, you're making financial decisions without the full picture.
And that's not where you want to be heading into tax season.
2. Are You Considering Any Major Business Purchases?
Thinking about buying new equipment, computers, furniture, or other business assets?
The timing of those purchases could affect your 2026 tax bill.
Depending on the asset and your business's circumstances, you may qualify for deductions under Section 179 or bonus depreciation.
But here's where I want you to be careful.
A tax deduction does not make a purchase free.
Spending $10,000 just to save a portion of that amount in taxes isn't necessarily a smart business decision.
And simply ordering or paying for an asset before December 31 doesn't automatically mean it's deductible this year. Depreciation generally depends on when the asset is placed in service.
Buy what your business actually needs, and understand the tax implications before making the purchase.
Don't let the tax tail wag the business dog.
3. Have You Reviewed Your Retirement Contributions?
Retirement contributions can be a valuable part of your tax strategy, especially if you're self-employed or own a small business.
Depending on your situation, options may include:
Traditional IRAs
SEP IRAs
SIMPLE IRAs
Solo 401(k) plans
Employer-sponsored retirement plans
Each has different contribution limits, eligibility requirements, and deadlines.
Some contributions may be made after December 31, while certain elections or employee deferrals require action before year-end.
The important thing is knowing which rules apply to your situation.
Retirement planning isn't just about saving for someday. It's also about making intentional financial decisions today.
4. Are Your Estimated Tax Payments Keeping Up With Your Income?
This one is especially important if your business has grown during 2026.
Maybe revenue increased. Maybe you landed a big contract. Maybe expenses were lower than expected.
Those are good things!
But higher profits can also mean higher taxes.
If your estimated payments are still based on last year's numbers, you could be heading toward an unpleasant surprise.
And remember, the IRS generally expects taxes to be paid throughout the year, not just when you file your return.
Reviewing your income and estimated payments now can help you identify a potential shortfall while there's still time to plan.
The fourth-quarter federal estimated tax payment for 2026 is generally due January 15, 2027.
5. S Corporation Owners: Is Your Salary Reasonable?
If your business is taxed as an S corporation and you actively work in it, this one deserves special attention.
The IRS expects shareholder-employees to receive reasonable compensation for the services they provide before taking nonwage distributions.
That means you can't simply take all your business profits as distributions to avoid payroll taxes.
But reasonable compensation doesn't necessarily mean paying yourself every dollar of profit as wages, either.
Your responsibilities, experience, industry, time commitment, and the financial circumstances of your business all matter.
If your business has grown significantly or your role has changed, it's worth reviewing your compensation before the year ends.
This is one of those areas where being proactive is much easier than fixing a problem later.
The Bottom Line: Tax Planning Happens Before Tax Preparation
Here's what I want you to remember.
Tax preparation tells us what happened.
Tax planning helps us decide what happens next.
Once the year closes, there are only so many things we can change. Some deductions, contributions, and elections have later deadlines, but many opportunities require action during the tax year.
You work too hard building your business to be surprised by a tax bill that could have been anticipated.
So before December 31, take a good look at your numbers, review your estimated payments, and consider whether there are any planning opportunities worth discussing.
And please, don't spend money you don't need to spend just because someone told you it's a write-off.
Need Another Set of Eyes on Your Numbers? 👀
At Ratliff Accounting & Tax, we help small business owners understand their financial picture, make informed decisions, and approach tax season with fewer surprises.
If you're not sure where your business stands heading into year-end, now is a good time to find out.
Let's get a little nosey about your numbers before December 31 gets here.
Ratliff Accounting & Tax | Tax Preparation • Tax Planning • Small Business Accounting
