Tax Planning for 2026: 10 Things Business Owners Should Do Before Year-End
The end of the year is one of the most important times to review your business’s tax situation.
Many business owners wait until Tax Season to start thinking about their taxes. However, several decisions that may affect your tax liability need to be considered before December 31, 2026.
With recent tax changes and new deduction opportunities, proper Tax Planning can help business owners avoid surprises, better organize their finances, and make more strategic decisions.
If you own an LLC, S Corporation, C Corporation, or are self-employed, here are 10 things you should review before the end of the year.
1. Review Your Business Financial Performance
The first step in effective Tax Planning is knowing exactly how your business is performing.
Before the end of the year, review:
Revenue generated during the year
Business expenses
Payroll
Contractor payments
Owner draws
Estimated Tax Payments
Loans
Credit cards
Accounts receivable
Accounts payable
Your Bookkeeping should be up to date so you have an accurate picture of your financial situation.
Ask yourself:
How much revenue has my business generated?
What is my actual profit?
How much have I paid in estimated taxes?
Could my tax liability be higher than expected?
Without updated financial numbers, it is much harder to create an effective Tax Planning strategy.
2. Review Your Estimated Tax Payments
Estimated tax payments are especially important for:
Self-employed individuals
LLC owners
S Corporation owners
Investors
Individuals with multiple sources of income
During the year, your income may have changed significantly.
If your business earned more than expected, your estimated tax payments may not be enough to cover your eventual tax liability.
Before the year ends, compare:
Estimated taxes paid vs. projected tax liability.
This can help you identify potential differences before filing your Tax Return.
3. Review Your Business Structure
Your business structure can have a significant impact on your taxes and Compliance obligations.
Depending on your situation, you may operate as:
Sole Proprietorship
Single-Member LLC
Multi-Member LLC
S Corporation
C Corporation
There is no business structure that is automatically better for every business owner.
The right decision should consider factors such as:
Net income
Reasonable compensation
Payroll
Self-Employment Tax
Administrative costs
State taxes
Compliance requirements
Business growth goals
For example, many people assume that an S Corporation always reduces taxes, but that is not necessarily true.
The right structure depends on the specific circumstances of each business.
4. Review Your Expenses and Potential Deductions
Before the end of the year, carefully review your business expenses.
Some potentially relevant expenses may include:
Advertising
Software
Rent
Utilities
Insurance
Professional services
Business travel
Business meals
Equipment
Office expenses
Contractor payments
However, you should not spend money simply to reduce your taxes.
A deduction generally reduces your taxable income. It does not mean the government will give you the full amount of the expense back.
Before making a year-end purchase, ask yourself:
Does my business actually need this expense?
Is it properly documented?
Does it make financial sense?
The timing of certain expenses can also affect the tax year in which they may be taken into consideration.
5. Review Equipment and Property Investments
If you are considering purchasing equipment, technology, vehicles, or other business assets, the end of the year can be a good time to review your strategy.
Depending on the asset, your business structure, and the applicable tax rules, certain investments may qualify for tax provisions such as Section 179 or bonus depreciation.
However, you should not make a purchase solely because of the potential tax benefit.
You should also consider:
Cost of the asset
Operational need
Cash flow
Financing
Date the asset is placed in service
Applicable tax treatment
Impact on your 2026 taxes
The goal should be to combine a sound business decision with an appropriate tax strategy.
6. Review Payroll and Contractor Payments
The final months of the year are also a good time to review your Payroll and payments to independent contractors.
Check:
Payroll records
W-2s
1099s
Payroll tax deposits
Benefits
Reimbursements
Bonuses
Contractor payments
It is also important to review whether the people working for your business are correctly classified as employees or independent contractors.
Incorrect classification can create tax and Compliance issues.
If you are considering paying year-end bonuses, it is also a good idea to analyze how and when those payments should be made.
7. Consider Retirement Plan Contributions
The end of the year can also be a good opportunity to review your retirement strategy.
Depending on your situation, options may include:
401(k)
SEP IRA
SIMPLE IRA
Solo 401(k)
The applicable rules, limits, and deadlines depend on the type of plan and the taxpayer's specific situation.
For this reason, it is important to analyze your strategy before making a contribution.
Proper planning can allow you to combine:
Retirement Planning + Tax Planning
into one broader financial strategy.
8. Review Your International Tax Situation
This point is especially important for Brazilian business owners living in the United States.
If you have financial ties to Brazil or other countries, review whether during 2026 you maintained:
Brazilian bank accounts
Foreign investments
Foreign businesses
Real estate abroad
Foreign partnerships or corporations
Income from other countries
Depending on your circumstances, you may have information reporting requirements such as:
FBAR
Form 8938
Form 5471
Form 8865
Form 8858
Form 3520
Other international information returns
Having a foreign account or asset does not automatically mean you will owe additional taxes.
However, it may create reporting obligations that need to be properly analyzed.
9. Organize Your Bookkeeping Before Year-End
Do not wait until Tax Season to organize your books.
Before December 31, try to have:
Bank accounts reconciled
Credit cards reconciled
Income properly classified
Expenses properly classified
Payroll updated
Contractor payments organized
Owner draws properly recorded
Loans properly recorded
Financial statements updated
Organized Bookkeeping allows your tax professional to have more accurate information for Tax Planning and for preparing your Tax Return later.
It also makes it easier to identify financial problems before they become tax problems.
10. Project Your Tax Liability
One of the most important steps in Tax Planning is estimating how much you may ultimately owe in taxes.
Your projection may consider:
Business income
Personal income
Deductions
Tax credits
Estimated tax payments
Payroll taxes
Self-Employment Tax
Capital gains
Foreign income
Other income
The goal is not to calculate your Tax Return exactly before the year ends.
The objective is to obtain a reasonable estimate of your potential tax liability.
This can help you make better decisions before 2026 comes to an end.
Why Shouldn't Tax Planning Wait Until Tax Season?
There is an important difference between Tax Preparation and Tax Planning.
Tax Preparation primarily looks at what has already happened.
Tax Planning focuses on what you can still do to prepare more effectively.
Once the tax year ends, some decisions can no longer be changed.
That is why waiting until March or April to start thinking about your taxes may mean missing important planning opportunities.
What Should You NOT Do Just to Pay Less in Taxes?
One of the most common misconceptions is:
“If I spend $10,000, I will save $10,000 in taxes.”
That is not how tax deductions work.
A deduction generally reduces your taxable income. It does not mean that you will receive the entire amount of the expense back.
Therefore, spending money solely to obtain a deduction can ultimately hurt your cash flow.
Effective Tax Planning should combine:
Business Need + Cash Flow + Tax Strategy
Tax Planning Checklist Before December 31
Before the end of 2026, consider reviewing:
Update your Bookkeeping
Review revenue and expenses
Review Estimated Tax Payments
Project your tax liability
Review your business structure
Analyze potential deductions
Review equipment and asset purchases
Review Payroll
Review contractor payments
Analyze retirement contributions
Review foreign accounts and assets
Organize tax documents
Speak with a tax professional before year-end
The earlier you start, the more options you may have to make strategic decisions.
How Can AES Accounting Help?
At AES Accounting, we help business owners review their tax situation before Tax Season and develop Tax Planning strategies tailored to their businesses.
Our services may include:
Tax Planning
Deduction analysis
Tax liability projections
Business Structure Planning
Estimated Taxes
LLC, S Corporation, and C Corporation
Foreign Income
FBAR
Form 8938
Foreign Businesses
Bookkeeping
Tax Return Preparation
Compliance
For Brazilian business owners living in the United States, we can also help identify potential reporting requirements related to international income, accounts, and assets.
Conclusion
The end of 2026 is an opportunity to review your business's financial and tax situation before entering Tax Season.
Effective Tax Planning is not simply about trying to pay less in taxes.
It is about understanding your numbers, anticipating your tax liability, and making business decisions early enough for them to potentially have a positive impact.
If you own an LLC, S Corporation, C Corporation, or are self-employed, do not wait until Tax Season to start thinking about your taxes.
The sooner you review your situation, the better prepared you will be to start 2027 with organized finances and a clearer tax strategy.
AES Accounting. Specialists in Tax Planning, Tax Return, Compliance, Bookkeeping, and tax solutions for individuals and businesses in the United States.
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