Business Tax-Cut Tips:
Maximize Retirement and HSA Contributions:
We discussed these items in another article.
Buy Equipment You (really) Need:
If you’re in the market for a new computer, generator, tools, or heavy equipment such as a backhoe, buy it before the end of the year. Between Bonus Depreciation & the 179 Expense, as a small business owner, you’ll be able to deduct it. However – HOWEVER, do not buy an expensive asset just for the tax deduction. Make sure it’s an investment, meaning the asset will generate more revenue than it costs to acquire. It’s disheartening to see an owner spend $10,000 to save $4,000 in taxes when the equipment sits in a field and rusts. Even worse is using debt to buy the asset. You’re trading years of payments (plus interest) for a one-year tax cut. There is nothing left to deduct, and the funds required to pay the tax have already been spent.
If there are expenses you can pay upfront for 2026, you are allowed to prepay certain costs, such as insurance, rent, subscription services, and business licenses, up to 12 months in advance (basically) and deduct them on your 2026 return. For this plan to work, you must actually make the payment, and the vendor must accept it. You can’t just write a check and put it in a drawer to mail next year.
If you’re low on items you need for business that don’t constitute a nondeductible inventory (such as buying trusses in bulk for a construction company), purchase them before the end of the year. Miscellaneous items include paper, supplies, folders, and maintenance incidentals such as cleaning supplies.
To the extent possible, defer billings and collections into next year. This does not mean receiving customer checks and not cashing them (which constitutes constructive receipt and counts as taxable income). It means delaying the completion and billing of a job, or scheduling a real estate closing, until next year if you’re a real estate agent.
This is more of an idea for general tax planning, but if you have some business-related work (must be legitimate & pay rate must be market - minimum wage), your children can do and don't mind dealing with payroll, hire them! Your minor child's pay is not subject to FICA (and generally unemployment), and you can pay them up to $16,100 tax-free in 2026, an amount equal to their standard deduction. You can then use their pay to fund their Roth IRA while reducing your tax liability by $4,000 to $6,000 annually!
Not a business owner? See our Year-End Tax Planning Tips for Individuals →
All courses and articles are for informational purposes only and do not constitute tax advice. Taxes are complicated - do not act on course information without consulting a professional. Always refer to treasury regulation before making any tax decision. Read the full disclaimer.
Great class! It provided step-by-step instruction, which I was able to use in my practice right away. I was unsure whether or not to pay for this class since I found it via YouTube, but to those on the fence, I feel confident that the teacher is an expert in this area, and the materials and videos are well worth the price. I will be checking in with them in the future for more continuing education.
- Mandala, Arcata, CA, Correcting Depreciation Errors - Using Form 3115 CourseI really appreciate you doing the class. It was quite helpful.
- Debbie Y, Greensboro, NC, 1099-NEC & 1099-MISC Course (Training Edition) CourseThis course package is thorough and will give you a solid handle on how to optimize your business expenses to minimize your taxes and keep appropriate records to handle any IRS challenges. Only want to dive into a particular topic? Jump to that video and scan forward to where your issue is addressed. Or watch the whole series to learn it all!
- Josh, Charles Town, WV, Real Estate Agent Tax-Cut Library, Agent Edition CourseThe 1120-H course is the second course that I’ve taken and both classes have been very informative and helpful. The courses have been easy to follow along with and if I have a question they are quick to get back to me and help me understand the issue. I would highly recommend OvernightAccountant classes.
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