Before You Close the Books: Your Year-End Tax Checklist

Before you close the books on 2026, take a look at how your tax strategy fits your business and personal finances. Changes in income, cash flow, investments, or long-term goals may call for a fresh approach as you prepare for 2027.

The One Big Beautiful Bill Act (OBBBA), enacted in 2025, remains an important part of that conversation. The question now is how its provisions apply to your circumstances and which decisions deserve attention before year end.

These nine planning priorities can help guide your next conversation with your CPA.

Revisit Your Business Structure and Compensation

Your business structure and compensation approach deserve a periodic review, especially if profitability or your personal income needs have changed. Before year end, ask your CPA to update projections and assess whether your current approach still supports your long-term goals. Questions to discuss include:

• If you own an S corporation, are your wages appropriate for your current circumstances?
• Would a different business structure or tax election better support your long-term goals?

Review Your Retirement Contributions and Plan for Next Year

Review your retirement contributions before year end to see whether you have room to contribute more. The 2026 401(k) deferral limits are $24,500, or $32,500 with the age 50 catchup contribution. Confirm the limit that applies to your age and plan, along with the tax treatment of any 401(k) or IRA contributions.

Time Business Expenses With Purpose

Review expenses you already expect to incur and discuss whether paying eligible costs before December 31 supports your tax strategy and cash flow needs. Timing decisions to discuss include:

• Ordering next year’s supplies now.
• Paying for 2027 professional development in advance.
• Finalizing a planned equipment purchase and placing it in service before year end (see item 4 below).

Let business needs lead the decision. A deduction alone is not a reason to make a purchase your business does not need.

Evaluate Equipment Purchases Before Year End

If an equipment purchase is already part of your business plan, review its timing with your CPA. Discuss whether it qualifies for bonus depreciation under OBBBA and whether placing it in service by December 31 fits your operational needs and tax strategy.

Pay particular attention to the placed-in-service requirement: the equipment must be ready and available for use, not simply purchased.

Review Your Pass-Through Entity Tax Strategy

If your business is eligible for a state pass-through entity (PTE) tax election, review whether it continues to offer a benefit for your business and its owners.

Align Charitable Giving With Your Tax Plan

As you plan year-end gifts, consider how the charitable deduction rules in effect for 2026 interact with your income and giving goals. Review the timing and structure of larger gifts with your tax advisor before deciding whether to give now or postpone a contribution.

Options to discuss include:

• Donor-Advised Funds (DAFs): Consider whether contributing now and directing your giving over time fits your goals and deduction eligibility.
• Qualified Charitable Distributions (QCDs): If you are age 73 or older, ask whether donating directly from an IRA (up to the $111,000 limit for 2026) fits your circumstances.

Consider Whether a Roth Conversion Fits

A change in income may be a reason to revisit whether a Roth conversion fits your plan. Before deciding, ask your CPA to compare the current tax cost with your expected future circumstances and review the requirements for tax-free withdrawals.

Coordinate Investment Gains and Losses

Review realized gains and losses with your financial advisor before year end to identify potential tax-loss harvesting opportunities. Losses may help offset capital gains. If losses exceed gains, a deduction against ordinary income may also be available, subject to an annual limit up to $3,000.

Build a Tax Plan Beyond the Next Filing Season

Year-end decisions should support more than your next tax return. Ask your CPA to compare your projected income, deductions, and cash needs across 2026 and 2027 and look further ahead at where major business or personal changes are expected. Questions to consider include:

• How might my projected income change in 2027?
• Which decisions should I make before December 31, and which can wait?
• How do this year’s choices support my longer-term business and personal goals?

Make Your Year-End Review Count

The most useful tax plan reflects where you are now and where you want to go next. Before December 31, review what has changed in your business and personal finances, identify decisions that need attention, and set priorities for 2027.

You do not need to have every answer before calling your CPA. Start with what has changed and what you hope to accomplish, then work together on the next steps.