The calendar says October, but your 2026 tax bill is still negotiable. Most of the deductions a business owner can take this year are locked in by December 31 — not by April 15. Here’s a practical checklist of what to do before the ball drops.
- Buy Equipment Now — 100% Bonus Depreciation Is Back
Congress restored 100% bonus depreciation and made it permanent for property acquired after January 19, 2025. That means qualifying equipment you put into service before December 31 can be fully deducted on your 2026 return — new or used, as long as it’s new to your business.
Section 179 lets you deduct up to $2,560,000 in 2026 for qualifying purchases. The deduction starts phasing out once total purchases exceed $4,090,000 and disappears entirely at $6,650,000.
Bonus depreciation has no dollar cap and can even create a loss — useful when a big purchase outweighs your profit. Section 179 can’t create a loss (the excess carries forward).
Key rule: equipment must be placed in service — delivered and in use — by December 31, 2026. Ordering in December with January delivery doesn’t count.
Heavy SUVs (6,000–14,000 lbs) have a separate $32,000 Section 179 cap for 2026. Run the numbers before buying the truck for the deduction.
- Fund Your Retirement Plan Before the Deadline
Retirement contributions are one of the biggest deductions available to owner-operators, and two different deadlines apply:
Solo 401(k): the plan must exist by December 31, 2026. For 2026 you can defer up to $24,500 as the employee, plus an employer contribution, up to a combined $72,000. If you’re 50 or older, the catch-up contribution is $8,000 — or $11,250 if you’re 60 to 63.
SEP IRA: easier to set up and can be opened as late as your tax filing deadline, but every dollar comes from the employer side (up to 25% of compensation, capped at $72,000). No employee deferral — so it shelters less at moderate incomes.
SIMPLE IRA: employee deferral of $17,000 for 2026. If you don’t already have one, the plan had to be established by October 1 — that’s this year’s window closed, but put it on the list for next year.
The solo 401(k) vs. SEP IRA choice can move $24,500 a year at the same income level. Get it set up before the deadline rather than debating it in March.
- Review Your S-Corp Salary Now, Not in April
If you’re an S-corporation owner, the IRS expects you to pay yourself reasonable compensation as a W-2 salary before you take distributions. December is when this gets fixed, because the payroll has to run in 2026.
If your salary has been light relative to profits, run a year-end bonus payroll before December 31 to get to a defensible number.
Review what you’ve paid year-to-date. A ‘zero salary’ S-corp year is one of the fastest ways to draw IRS attention.
Payroll processing takes days, not minutes — tell your payroll provider what you need no later than mid-December.
- Pay Your Q4 Estimated Taxes
The fourth-quarter estimated payment for individuals is due Friday, January 15, 2027. If your income was uneven this year, recalculate rather than paying the same amount you paid in September — the goal is to cover your actual liability and avoid an underpayment penalty.
Already had a great year? A larger Q4 payment now beats penalties later. The IRS doesn’t care that your busy season was November.
Had a slow year? Drop the payment to match reality and free up cash.
Corporations on a fiscal year: check your specific installment date — the fourth installment lands December 15, 2026.
- Clean Up Your Books Before January
Nothing slows down a tax return like a messy general ledger. A few hours in December saves weeks in February.
Reconcile every bank and credit card account through December 31. Unreconciled accounts are where deductions go to die.
Collect W-9s now from every contractor you paid $600 or more. Chasing forms in January is miserable; the 1099-NEC filing deadline is February 1, 2027 (January 31 falls on a Sunday), and so is the W-2 deadline.
Review your accounts receivable and payable. Accrual-basis businesses can time deductions and income recognition before year-end.
Confirm your inventory count method before the count, if applicable.
December 31 arrives on a Thursday this year. Every one of these items needs to be done, delivered, or filed by then. Put the dates on your calendar today.
Book Your Free Consultation
Every situation is different, and year-end planning only works when it’s tailored to your numbers. RAMTAXES is a 100% virtual firm — we meet with small to medium-sized business owners and high-net-worth individuals across the country over video or phone. Call us at 201-530-0372 to book your free consultation, and let’s make sure you keep everything you’re entitled to.