7 Tax Planning Conversations Business Owners Should Have Before the End of the Year

7 Tax Planning Conversations Business Owners Should Have Before the End of the Year

The best time to talk about your taxes isn't when you're filing them. It's while you can still do something about them.

For many business owners, taxes follow the same routine every year. You run your business, December comes and goes, and sometime the following spring you send a pile of documents to your accountant and find out how much you owe.

There's nothing wrong with tax preparation. We all have to file a return.

But tax preparation and tax planning are two very different things.

Your tax return tells us what already happened. Tax planning asks what we can still change.

That's why the final few months of the year can be so important. Before December arrives, here are seven conversations we believe business owners should be having with their financial planner and tax professional.

1. What Are We Actually Going to Make This Year?

Everything starts with knowing your numbers.

By fall, you should have a reasonably good idea of what your business will earn for the year. That doesn't mean you need to know the exact number, but you should be able to project revenue, expenses, payroll, owner compensation, and ultimately taxable income.

For a business with variable revenue, this is especially important. A great fourth quarter could push income significantly higher than expected, while a slower year could create planning opportunities that aren't available when income is higher.

Before making a tax move, we first want to answer a simple question: If we do nothing between now and December 31, what does your tax return probably look like?

Once we know that, we can start planning.

2. Are We Using the Right Retirement Plan?

For business owners, a retirement plan can be much more than a place to save for retirement. It can also be one of the most powerful tax planning tools available.

Depending on the business, that could mean a Solo 401(k), SEP IRA, SIMPLE IRA, traditional 401(k), profit-sharing contribution, or even a cash balance plan.

In 2026, the employee contribution limit for most 401(k) plans is $24,500, while the total defined contribution limit can reach $72,000 before applicable catch-up contributions.

The important conversation isn't simply, "Can I put more into retirement?" It's whether your current retirement plan still makes sense for the business you've built.

A retirement plan that worked when you were making $150,000 may not be the best structure when the business is generating $750,000 or $1 million.

3. Should We Accelerate Any Business Purchases?

Business owners often hear some version of, "Buy it before year-end so you can write it off."

That's not always good advice.

Spending $100,000 solely to save $30,000 in taxes still means you spent $70,000 you otherwise could have kept.

But if you're already planning to purchase equipment, technology, vehicles, or other qualifying property, the timing may matter.

This is particularly relevant in 2026 because current law permanently restored 100% bonus depreciation for eligible property acquired after January 19, 2025, and expanded Section 179 expensing rules.

The question shouldn't be, "What can I buy to lower my taxes?"

It should be, "What does the business actually need, and is there a tax advantage to buying it now instead of later?"

That's a very different conversation.

4. Is Our Entity and Owner Compensation Still Appropriate?

As businesses grow, the structure that made sense three years ago may no longer make sense today.

Maybe you started as a sole proprietor and an S Corporation election now deserves consideration. Maybe you're already operating as an S Corporation, and your salary hasn't been revisited as the company has grown. Perhaps multiple businesses or new partners have made the structure more complicated.

Entity planning isn't something we recommend changing every December simply to chase a deduction. There are legal, payroll, administrative, and tax consequences to consider.

But year-end is a great time to ask whether the way you're currently paying yourself and operating the business still fits where the company is today.

5. Are There Personal Financial Moves We Should Coordinate With the Business?

This is the conversation we think is most often missed.

Your business tax return and personal financial plan don't live in separate worlds.

A particularly profitable business year could affect charitable giving decisions, investment gains, Roth conversions, retirement contributions, estimated taxes, and other planning opportunities.

Maybe you have investments sitting at a loss that could be harvested to offset realized capital gains. Maybe you're already charitably inclined and contributing appreciated investments to a donor-advised fund makes more sense than simply writing checks. Maybe this is actually an unusually low-income year and recognizing additional income intentionally deserves consideration.

Good tax planning shouldn't ask only, "How do we lower the business's tax bill?"

It should ask, "How does what's happening in the business affect the family's entire financial plan?"

6. Have We Paid Enough Tax Already?

Nobody likes a surprise tax bill in April.

By fall, we want to compare your projected tax liability with what you've already paid through estimated payments and withholding.

If the business has significantly outperformed expectations, your quarterly estimates may no longer be sufficient. If income came in lower, you may be sending the IRS more cash than necessary when that money could remain available to the business.

This is also where cash-flow planning matters. Knowing that you may owe another $60,000 is very different when you discover it in October instead of April.

The goal isn't necessarily to make your April tax bill exactly zero. It's to understand what's coming and make sure the cash is there when you need it.

7. What Opportunities Disappear After December 31?

Finally, we want to look for anything with an actual year-end deadline.

Some planning strategies can be handled when you file your return. Others can't.

Certain retirement plan decisions, charitable gifts, business expenses, investment transactions, and other strategies need to happen during the tax year to count for that year.

That's why waiting until your tax appointment in March can be frustrating.

Your accountant might identify a strategy that would have saved you money.

The problem is that December 31 has already passed.

Tax Planning Is About More Than Paying Less

There's an important point underneath all seven of these conversations.

The goal of tax planning isn't to eliminate taxes at all costs.

If someone tells you they can make your tax bill disappear, we'd probably ask a few more questions.

Taxes are only one part of the equation. We also care about cash flow, profitability, retirement goals, investment strategy, business growth, and what you actually want your money to accomplish.

Sometimes the right strategy saves taxes today. Sometimes it intentionally pays tax today to create a better opportunity tomorrow. And sometimes the smartest decision is to skip a deduction entirely because the underlying transaction doesn't make financial sense.

That's the difference between tax preparation and tax planning.

One records what happened.

The other allows you to influence what happens next.

And for business owners, some of the most valuable financial conversations of the year should happen well before December 31.