Most of the tax moves that lower your 2026 bill have to happen by December 31. After that, your tax preparer can only report what already happened.

That’s why year-end tax planning matters more than tax prep. In April, the numbers are fixed. In October and November, you still have time to buy equipment, fund a retirement plan, fix your S corp payroll, and decide when income lands.

2026 is also the first full year under the One Big Beautiful Bill Act, which changed several rules small business owners rely on. Here’s what Colleyville, Southlake, Keller, and Grapevine business owners should look at before the year closes.

1. Get your books current before you plan anything

Every move below depends on knowing your profit for the year. If your books are three months behind, you’re guessing.

Reconcile every bank and credit card account through September or October. Then project the last two or three months based on what you know is coming. That projection tells you whether you’re looking at a big tax bill, a small one, or a loss, and which of the moves below are worth making.

If you can’t produce a current profit and loss statement this week, start there. It’s the step most owners skip, and it’s why year-end planning so often turns into April damage control.

2. Buy equipment and vehicles you already need

If you were planning to replace a truck, a computer, or shop equipment in early 2027, buying it before December 31 can move the whole deduction into 2026.

Two rules make that possible:

  • Section 179 lets you expense up to $2,560,000 of qualifying equipment in 2026. The limit starts phasing out once your total purchases pass $4,090,000, so it covers nearly every small business. See IRS Publication 946 for what qualifies.
  • Bonus depreciation is back at 100% for property acquired after January 19, 2025, and the One Big Beautiful Bill Act made it permanent. Unlike Section 179, it has no dollar cap and can create a loss.

The catch is the date. The asset has to be placed in service by December 31, not just ordered or paid for. A truck sitting on a dealer lot in Grapevine on New Year’s Eve doesn’t count.

Vehicles have their own limits. Passenger cars under 6,000 pounds gross vehicle weight have a low first-year cap. Heavy SUVs, pickups and vans over 6,000 pounds get much more room, especially when bonus depreciation covers what Section 179 doesn’t. You also need to track business use. A truck used 60% for business gets 60% of the deduction.

One more thing: don’t buy something you don’t need just to save tax. A $50,000 purchase that saves $12,000 in tax still costs you $38,000.

A Texas wrinkle. Starting in 2026, Texas exempts the first $125,000 of business personal property at each location from property tax, up from $2,500 (Texas Tax Code §11.145). A big equipment purchase can push a location over that line and bring back a property tax bill. If you’re close, factor that in before you buy.

3. Put more into a retirement plan

A retirement contribution is one of the few deductions where the money stays yours. The 2026 limits went up across the board (IRS announcement):

Plan

2026 limit

401(k) or solo 401(k) employee deferral

$24,500

Catch-up, age 50 and older

$8,000

Total employee plus employer, 401(k) or SEP IRA

$72,000

Traditional or Roth IRA

$7,500

The deadlines depend on the plan and your entity type, and this is where owners lose money.

  • Solo 401(k), S corp owners: the plan has to exist and your deferral election has to be made by December 31. Your deferrals also have to run through payroll, so plan your last paycheck of the year now.
  • Solo 401(k), sole proprietors and single-member LLCs: a first-year plan can be opened as late as April 15, 2027, and still take 2026 deferrals. That’s a newer rule from SECURE 2.0, and an extension doesn’t push it back.
  • SEP IRA: can be opened and funded up to your filing deadline, including extensions. It’s the easiest catch-up option, but it only allows employer contributions, so a solo 401(k) usually lets a lower-income owner put away more.

If you have employees, a new plan brings coverage and testing rules. Talk it through before you sign anything.

4. Decide which year your income and expenses land in

Most small businesses use the cash method, so income counts when you receive it and expenses count when you pay them. That gives you some control in December.

If 2026 was a strong year and you expect 2027 to be slower or similar, you can:

  • Send December invoices late in the month so payment arrives in January
  • Pay January rent, insurance or supplies in December
  • Pay outstanding vendor bills before year-end instead of waiting for the due date

If 2026 was a down year, do the opposite. Pull income into 2026 while you’re in a lower bracket.

A few limits apply. Prepaying expenses generally works only for benefits that don’t extend more than 12 months, under the IRS 12-month rule. Charging an expense to a business credit card in December counts in 2026, even if you pay the card in January. And a check you received in December counts as 2026 income whether or not you deposited it.

5. S corp owners: fix payroll before the last paycheck

S corp owners have three items that have to be handled through payroll, and payroll closes for the year on your last pay date.

Your salary. If you took mostly distributions this year and very little salary, December is your chance to correct it. A salary the IRS sees as too low is one of the most common S corp audit issues. We covered how to set the number in How Much Should You Pay Yourself as an S Corp Owner in Texas?

Your health insurance. If the S corp pays health insurance premiums for an owner with more than 2% of the company, those premiums have to be added to your W-2 wages. If they aren’t on the W-2, you can lose the self-employed health insurance deduction on your personal return. The IRS explains the rule in S Corporation Compensation and Medical Insurance Issues.

Your retirement deferrals. As covered above, solo 401(k) deferrals for S corp owners come out of wages. No paycheck, no deferral.

Tell your payroll provider about all three before they run the final 2026 payroll. Fixing them after W-2s go out means corrected forms and amended filings.

6. Get your 1099s ready now, under the new $2,000 rule

For payments made in 2026, you only file a Form 1099-NEC for a contractor you paid $2,000 or more during the year. The old $600 threshold, unchanged since the 1950s, is gone (IRS instructions for Forms 1099-MISC and 1099-NEC).

That means fewer forms, but it doesn’t mean less tracking. You still need a total per contractor to know who crosses the line. A contractor paid $900 in March and $1,200 in November needs a 1099.

Before December ends:

  • Run a vendor report for 2026 and flag everyone at or near $2,000
  • Collect a Form W-9 from anyone you’re missing, while they still want to be paid
  • Check that payments by credit card or apps like PayPal are excluded, since those are reported by the processor

The 2026 forms are due to contractors and the IRS by February 1, 2027. Chasing W-9s in late January is the most common reason those deadlines get missed.

7. Rethink year-end giving under the 2026 rules

Charitable deductions changed this year, and the change cuts both ways (IRS Tax Topic 506).

  • If you take the standard deduction, you can now deduct up to $1,000 of cash gifts to qualified charities, or $2,000 on a joint return. Gifts to donor-advised funds don’t count.
  • If you itemize, only giving above 0.5% of your adjusted gross income is deductible. On $300,000 of income, the first $1,500 you give doesn’t reduce your tax.
  • If your business is a C corporation, only giving above 1% of taxable income is deductible.

For itemizers, this makes “bunching” more useful. Instead of giving the same amount every year, you combine two or three years of gifts into one year so more of it clears the floor. A donor-advised fund lets you take the deduction now and send the money to charities over time.

For most pass-through owners, donations show up on your personal return, not the business return. Keep the receipts either way.

8. Check your estimated taxes before the January payment

The fourth-quarter estimated payment for 2026 is due January 15, 2027. Look at it now, while you can still adjust.

You generally avoid an underpayment penalty if your payments plus withholding cover the smaller of:

  • 90% of your 2026 tax, or
  • 100% of your 2025 tax, or 110% if your 2025 adjusted gross income was over $150,000

The IRS walks through this on its estimated taxes page.

If you’re short, S corp owners have a useful option. Federal tax withheld from your wages is treated as if it were paid evenly through the year, even when it’s all withheld in December. A larger withholding on your last paycheck can cover an earlier shortfall that a January estimated payment can’t.

9. Don’t forget the Texas side

Texas has no personal income tax, but two state items tie back to your 2026 numbers.

Franchise tax. Your 2027 franchise tax report is based on 2026 revenue. Businesses at or under $2,650,000 in annualized total revenue owe no franchise tax for the 2026 and 2027 report years (Texas Comptroller). If you’re close to that line, the timing of December billing can matter at the state level too. Every LLC and corporation still has to file its Public Information Report or Ownership Information Report by May 15, 2027, even with no tax due. Our Texas franchise tax guide covers who owes it.

Business personal property. With the new $125,000 exemption, many small businesses will owe nothing on their equipment and furniture. If your property at a location is worth more than that, your rendition to the Tarrant Appraisal District is due April 15, 2027. A year-end equipment list makes that filing quick.

Your year-end checklist

  • Reconcile books through October and project the rest of the year
  • Decide on equipment or vehicle purchases, and get them in service by December 31
  • Open or fund a retirement plan, and confirm its deadline for your entity type
  • Time December invoices and bills based on whether 2026 or 2027 should carry the income
  • S corp owners: confirm salary, health insurance and deferrals before the final payroll
  • Total contractor payments and collect missing W-9s
  • Plan charitable gifts around the new floors
  • Check your safe harbor before the January 15 estimated payment
  • Note where you stand on the franchise tax threshold and the $125,000 property exemption

Start your year-end review now

The owners who save the most at tax time made their decisions in October and November. By January, it’s too late to change most of the numbers.

Books By Bonnie is run by Bonnie Huggins, a licensed tax attorney, enrolled agent and bookkeeper serving Colleyville, Southlake, Keller, Grapevine, Roanoke, Trophy Club, North Richland Hills, and the surrounding DFW area. A year-end review looks at your actual 2026 numbers and shows which of these moves are worth making for your business.

Schedule a free consultation before December fills up.

This article is general information, not legal or tax advice for your specific situation. Tax figures are for the 2026 tax year and may change.