Start with an estimate of this year's taxable income and next year's. Whether you want to accelerate deductions or defer them depends on whether your rate is likely to be higher now or later.
Cash-basis businesses can often defer invoicing into January or pay deductible expenses in December. Prepaying some expenses is allowed within limits. Make sure any shift reflects real business decisions.
Assets must be placed in service, not just ordered, to be deducted this year. With 100% Bonus Depreciation permanent for property acquired after January 19, 2025, and a Section 179 limit of about $2.5 million (indexed for inflation), equipment, vehicles and qualifying improvements can usually be written off in full. Compare Section 179 and Bonus Depreciation.
If you bought, built or renovated commercial or rental property this year, a study can move 20% to 40% of the building cost into property eligible for 100% Bonus Depreciation. The study can be completed after year-end, before you file, but the property must be placed in service this year. Estimate your savings.
If you developed or improved products, processes or software this year, gather project records while they're fresh. The credit reduces tax dollar for dollar, and qualifying start-ups can apply it against Payroll Taxes.
Contributions to a 401(k), SEP or defined benefit plan can substantially reduce taxable income. Some plans can be established after year-end, but employee deferrals and certain plan types have earlier deadlines, so check them now.
The state and local tax deduction cap for individuals rose to $40,000 under the 2025 law (with a reduction for higher incomes), but many owners of partnerships and S corporations still benefit from paying state tax at the entity level through a PTET election. Deadlines vary by state and some must be made during the year.
From 2026, itemized charitable deductions only count above a floor of 0.5% of income, and corporate charitable deductions only above 1% of taxable income. Non-itemizers can deduct up to $1,000 ($2,000 for joint filers) of cash gifts to qualifying charities. Bunching gifts into one year can help.
Write off assets that have been sold, scrapped or abandoned but are still on the books, and check that renovations replaced on your buildings have been treated correctly. It's an easy source of overlooked deductions.
Make sure estimated tax payments cover the safe harbor to avoid penalties, and confirm your entity and owner compensation still fit your profits. Read: LLC vs S Corporation in 2026.
The Section 179D and 45L energy-efficiency incentives were cut back for projects beginning, or homes acquired, after June 30, 2026. Projects already underway before then should still be reviewed.
Want help working through the list? A year-end review is the best-value hour most Business Owners spend all year. Learn more about our Taxation Services service or book a free consultation.
This article is general information, not tax, legal or accounting advice. Tax rules change and outcomes depend on your specific facts; speak with a qualified tax professional before acting.
Both let you write off equipment and improvements in year one, but they work differently. A clear comparison of Section 179 and 100% Bonus Depreciation for 2026.
Read article →From Cost Segregation and 1031 exchanges to Real Estate Professional status and Short-Term Rentals: seven proven Tax Strategies for US Property Investors.
Read article →How LLC and S Corporation taxation compare in 2026, when an S Election saves self-employment tax, and what the permanent QBI Deduction means for owners.
Read article →We'll go through this checklist with you and your CPA before the opportunities close on December 31.
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