The Year-End Tax Checklist for Business Owners: 9 Moves That Expire December 31

There are two kinds of tax work: reporting and planning. Reporting happens in the spring and changes nothing. Planning happens now — because most of the levers that determine your 2026 tax bill lock at midnight on December 31.

Here is the checklist we run with business-owner clients every November and December.

1. True up your owner compensation

If you’re an S-corp owner, your salary should reflect this year’s actual profit, not the number set years ago. Too low risks reclassification; too high overpays payroll tax and can distort your QBI deduction. This must run through an actual December payroll — it cannot be fixed retroactively in March.

2. Hit the retirement plan deadlines — the right ones

Contribution deadlines get the attention, but establishment deadlines are the trap. Certain plans and features (including employee deferral elections for a solo 401(k)) generally need to exist or be elected by December 31, even when funding can wait until the filing deadline. If you’ve had a strong year and want to shelter more than a SEP allows, the plan decision has to happen now.

3. Run the PTET/BAIT analysis

New Jersey and New York pass-through owners: the entity-level tax election converts capped personal SALT into an uncapped business deduction. Whether it wins in 2026 depends on your income and other deductions — and payment timing (December vs. January) controls which federal year gets the deduction. Model it before the estimated payment dates pass.

4. Time equipment purchases deliberately

With 100% bonus depreciation restored on a permanent basis and generous Section 179 limits, equipment placed in service by December 31 deducts in full this year. The rule to respect: in service, not merely ordered or paid for. And buy because the business needs it — spending $1 to save 35 cents is only smart when the $1 was getting spent anyway.

5. Settle your Q4 estimates before April can surprise you

Project full-year income now and compare against the safe harbors (generally 90% of the current year or 100–110% of last year’s tax). A January 15 estimated payment sized correctly is vastly cheaper than penalties — and if you’re a W-2 spouse household, a December withholding adjustment can cure an underpayment retroactively in a way estimates can’t.

6. Sweep the balance sheet

Write off genuinely uncollectible receivables. Accrual-basis businesses: review whether bonuses declared now and paid within the window deduct this year. Cash-basis businesses: December’s paid expenses and January’s deferred invoicing are your two simplest levers.

7. Empty the FSA-type buckets and fund the HSA

Health savings account contributions are one of the few triple-advantaged dollars in the code, and dependent care FSA elections for next year happen during open enrollment — miss it and the opportunity waits a full year.

8. Harvest investment losses — carefully

Realized losses offset gains and up to $3,000 of ordinary income, but wash sale rules look across all your accounts, including IRAs and a spouse’s brokerage. Coordinate before selling, not after.

9. Document everything

The comp study, the board minutes, the accountable plan reimbursements, the mileage log. December is when the file gets built; an audit two years from now is won or lost on what exists in writing today.

Romanchuk CPA LLC runs year-end strategy sessions for business owners each November and December — 60 minutes, a written action list, every item priced in expected savings. The December calendar fills first: book at rfg.tax.

This article is general information, not tax advice for your specific situation.