Most tax decisions get made in March, when it is too late to change anything. By then the year is closed and your accountant can only report what already happened. The decisions that actually move your tax bill have to be made while the year is still open, which means October, November, and December.
Every one of the moves below depends on knowing roughly what your business will earn this year. If your books are three months behind, you are guessing, and your accountant is guessing with you. So the first step of year-end tax planning is not a tax move at all: get the books current through at least September, ideally through November, and get a realistic projection for the full year.
Start with a full-year profit projection
Take your year-to-date profit and loss statement, add what you expect for the remaining months, and adjust for anything unusual: a large job still to be billed, a known slow December, a big expense coming in Q4. This does not need to be precise. It needs to be close enough to tell whether this is a high-income year, a low-income year, or about normal.
That one number drives every decision that follows. In a strong year, pulling deductions into this year and pushing income into next year usually makes sense. In a weak year, you may want the opposite, so the deductions land in a year when they offset more income. Compare the projection against the estimated tax payments you have made so far, too. The fourth-quarter estimated payment for 2026 is due January 15, 2027, and it is much easier to size correctly with a real projection in hand.
Timing moves: equipment, prepaying, and deferring
Equipment, vehicles, and other assets generally have to be placed in service by December 31, not just ordered or paid for, to be eligible for depreciation this year, including Section 179 expensing or bonus depreciation. A truck sitting at the dealer on New Year's Eve does not count. Whether to take the full write-off now or spread it out is a decision for your accountant, and the limits change with tax law, so confirm the current rules before you buy anything for the deduction.
If your business files on the cash basis, you have some control over timing. Paying January's bills in December moves the deduction into this year, and many prepaid expenses are deductible when paid as long as the benefit does not extend beyond 12 months or past the end of next year. On the income side, holding December invoices until early January can push that income into next year. Do not let tax timing hurt your cash position, and do not hold invoices for customers who are already slow to pay.
On the accrual basis, the rules are different: income is generally taxed when earned and expenses deducted when incurred, regardless of when the money moves. Accrual businesses can review open receivables for debts that are truly uncollectible and write them off before year end, and confirm that December's expenses are recorded even if the bills arrive in January.
Owner pay, retirement plans, and 1099 prep
If you own an S corporation, the salary you pay yourself has to run through payroll during the year. A reasonable salary cannot be added after December 31, and health insurance premiums the company pays for a more-than-2% shareholder generally need to be reported on that owner's W-2. Talk to your payroll provider in November, not January.
Retirement plans are one of the larger levers available to owners. Plans differ in how much you can contribute and when the plan has to be set up, so ask your accountant now which one fits and what deadline applies to it, rather than discovering in April that the window has closed.
Finally, get ready for January 1099 filings now. Collect a Form W-9 from every contractor you paid this year, and make sure your books show what each one was paid and how. For payments made in 2026, the Form 1099-NEC reporting threshold rose to $2,000, up from $600. Payments made by card or through a payment app are generally reported by the payment company instead of by you, which is another reason to know how each contractor was paid.
Get the books current before the planning meeting
None of this works if the numbers are stale. If your books are behind, Evolv Bookkeeping can catch them up for $199 for each month behind, completed within 2 days and guaranteed in writing, so your accountant has real numbers before December. After that, we keep your books current every month for $199 flat, and 1099 prep is handled at year end. No contracts, cancel anytime. Get an instant quote on our homepage.