Year-End Tax Wins

As the year draws to a close, it's a smart time to maximize your current-year tax deductions and explore other tax planning opportunities. Here's a practical checklist of actions that can help reduce your 2026 tax bill.

Pre-pay Business Expenses

Consider prepaying certain deductible expenses before December 31st. You can often deduct advance payments for subscriptions, advertising, business insurance premiums, rent, licenses, and similar items that don't extend beyond 12 months.

Maintenance and Repairs

Complete repairs on equipment, vehicles, and physical plant items by year-end to claim the deductions in the current tax year.

Invest in Equipment

Purchase and place qualified business equipment into service before year-end. For tax year 2026, businesses can deduct the full cost of eligible equipment up to a generous $2,560,000 limit under Section 179. This powerful provision allows immediate expensing rather than spreading depreciation over multiple years.

Maximize Qualified Business Income (QBI) Deductions

Eligible owners of pass-through businesses — such as S corporations, partnerships, and sole proprietorships — may qualify for up to a 20% deduction on qualified business income. For 2026, a new minimum deduction of $400 (indexed for inflation) applies to noncorporate taxpayers whose aggregate QBI from activities in which they materially participate exceeds $1,000.

Contribute to Retirement Accounts

Maximize employer matching contributions to employees' 401(k) plans. These contributions are generally deductible for the business.

Fund Health Savings Accounts (HSAs)

Employer contributions to employee HSAs — including your own if eligible — are tax-deductible for the business.

Capture Losses and Charitable Gifts

Review your financials carefully to identify all available deductions and losses. Additionally, donating equipment, computers, or inventory to charity can generate valuable year-end tax benefits.

Final Tip

Tax planning works best when done proactively. Schedule a meeting with your tax professional well before December 31st to review your specific situation and implement strategies tailored to your business. Acting early can help you avoid last-minute stress and capture every available opportunity to lower your tax exposure.