What is the actual deadline for year end tax moves?

December 31 at midnight for nearly everything: equipment placed in service, retirement plans established and funded, and charitable contributions made. The one exception that runs later is the Q4 estimated tax payment, due January 15 of the following year. S corp elections for the next tax year have a separate deadline, generally March 15, that is unrelated to the December 31 cutoff.

Can I defer business income into next year?

Yes, within limits, if you use the cash method of accounting. Delaying invoices or bonus payments until January pushes that income into next year for tax purposes, since cash-method income is taxed when received, not when earned. The reverse is also true: a payment received in December counts as this year's income even if the work continues into January. Document the business reason for any timing decision; the IRS looks skeptically at deferral with no operational basis.

How much can I contribute to a Solo 401(k) by year end?

For 2026, the employee deferral limit is $24,500, and the combined employee-plus-employer limit is $72,000. Add a catch-up of $8,000 if you are 50 to 59 or 64 and older, or $11,250 if you are 60 to 63 and your plan allows it. The plan itself must be established by December 31 to accept a contribution for that year; employee deferral elections generally need to be made before year end too, though the actual employer contribution can sometimes be funded up to the extended filing deadline.

Is a Roth conversion worth doing in a high income year?

Sometimes, if this year is unusually high and next year is projected lower. You pay tax now on the converted amount at this year's rate, and the funds then grow tax free going forward. Roth conversions are irrevocable and increase your adjusted gross income in the conversion year, which can affect Medicare premium surcharges if you are 65 or older. This decision needs multi-year income modeling, not a single-year snapshot, so it belongs in the October planning conversation, not a December scramble.

Should I buy equipment just to get a Section 179 deduction?

No. The deduction should follow a real business need, not create one. If you already need the equipment, buying and placing it in service by December 31 accelerates the deduction into this year instead of spreading it over several years. For 2026, Section 179 allows up to $2,560,000 of qualifying property, with the deduction phasing out above $4,090,000 of total equipment purchases, and it must be placed in service, not just ordered or paid for, by year end.

What happens if my business had a loss this year?

The planning flips. Instead of accelerating deductions, you may want to defer discretionary expenses to a year when income (and your tax rate) is higher, so the deduction is worth more. Net operating losses can generally be carried forward to offset future income, subject to an 80 percent taxable income limitation in the carryforward year. Whether accelerating or deferring wins depends on your specific carryforward position, which is worth confirming with a CPA before year end rather than guessing.

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Year End Tax Planning for Business

Every strategy on this page has the same deadline: December 31 at midnight. Here is what has to be decided in October, executed in November, and locked down in December, plus a worked example and the deadlines that actually matter.

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A guide by Taxstra Tax & Accounting · CPA-led tax strategy for business owners

Written by Bryan Martin, CPA, Managing Partner and Founder of Taxstra. Last updated July 17, 2026.

Want the printable version? Use our year end tax planning checklist →

Key Insight

Year end tax planning for a business means making decisions in October and November so they can be executed before the December 31 deadline: accelerating or deferring income, funding retirement plans, timing equipment purchases, and finalizing charitable giving. Almost none of these moves work after December 31. The one deadline that runs later is the Q4 estimated tax payment, due January 15.

Your Guide

01The Decision and the Deadline 02Month-by-Month Q4 Timeline 03Income Acceleration vs Deferral 04Retirement, Equipment, and Charitable Moves 05Worked Dollar Example 06Documentation You Need 07Implementation Checklist 08Frequently Asked Questions

The Decision and the Deadline

Almost every year-end lever closes on the same date

December 31 at 11:59 PM is the hard stop for nearly every year-end tax strategy. Equipment purchases, retirement plan establishment, and charitable giving all need to be complete, not just initiated, by then. There is no way to retroactively implement these strategies in January, no matter how good the reason.

The real planning window is narrower than the deadline suggests. Equipment needs to be ordered early enough to be delivered and placed in service, not just purchased. Retirement plans, especially cash balance plans, need weeks of setup time. That is why this page starts the clock in October, roughly 90 days out, rather than waiting for the December rush.

Key Insight

This page owns the business-owner year-end decision itself: what to do, in what order, by when. For a printable, checklist-style version of the same deadlines, use our year end tax planning checklist.

Month-by-Month Q4 Timeline

October, November, December: what to do and when

This is the operational version of the decision above. Treat the December items as non-negotiable; the October and November items are what make December achievable instead of a scramble.

October

About 90 days left

Run a preliminary year-end profit and loss forecast
Review estimated tax payments made so far against the safe harbor
Identify equipment purchases that could qualify for Section 179 or bonus depreciation
Check remaining retirement plan contribution room

November

About 60 days left

Finalize the income projection and estimate total tax liability
Order equipment with a confirmed December delivery and install date
Complete paperwork for any Roth conversion you plan to execute
If you are considering an S corp election for next year, start that conversation now

December

Hard deadline, December 31

Equipment must be placed in service, not just ordered, by December 31
Charitable contributions must be made and documented by December 31
Retirement plans (Solo 401(k), SEP-IRA, cash balance) must be established by December 31 to accept a contribution for the year
Confirm the Q4 estimated payment is calculated correctly ahead of the January 15 deadline

Illustrative timeline for a calendar-year business. Fiscal-year businesses should shift these windows to their own year end.

Watch Out

Equipment must be delivered, installed, and operational by December 31 to count for that tax year. Paying for it or having it on order is not enough. Coordinate delivery dates with vendors well before the holiday shipping slowdown; December orders that arrive in January are a full miss, not a partial one.

Income Acceleration vs Deferral

Which direction depends entirely on which year is higher

If this year is a low-income year, or you have already used up major deductions, accelerating income into December (invoicing early, collecting bonuses, closing projects before year end) can make sense. If this year is a high-income year and next year looks lower, deferring income to January does the opposite: it pushes taxable income into a year where it is worth less to defer.

Accelerate income when

This is a lower-income year than expected next year
You have room left in a lower bracket
You can legitimately invoice and collect before December 31

Defer income when

This year is unusually high and next year looks lower
You are close to a bracket threshold or QBI phaseout
Delaying invoices to January is operationally realistic

Watch Out

Under the cash method, a payment received in December is this year's income even if the work carries into January. A payment received in January is next year's income even if you billed for it in December. This timing is legitimate and commonly used, but the decision needs to be made deliberately, documented, and applied consistently, not adjusted after the fact.

Taxstra CPA Tip

Pair income timing with expense timing. In a low year, accelerate both income and deductible expenses. In a high year, defer both. Moving only one side of the ledger cuts the benefit roughly in half.

Retirement, Equipment, and Charitable Moves

The three biggest deduction levers before December 31

Retirement plan contributions

Contributions reduce taxable income dollar for dollar, and the deadline bites in two different ways. A Solo 401(k) or SEP-IRA generally needs to be established by December 31 to accept a contribution for that year, though the funding itself can sometimes extend to your filing deadline. A cash balance plan is stricter: it must be established and its terms finalized well before year end, since the actuarial calculation takes real lead time. For 2026, the Solo 401(k) employee deferral limit is $24,500, with a combined employee-plus-employer cap of $72,000, plus a catch-up of $8,000 (ages 50 to 59 and 64-plus) or $11,250 (ages 60 to 63) if the plan allows it. SEP-IRA contributions max out at $72,000, or 25 percent of net self-employment income, whichever is less.

Equipment and depreciation

Section 179 expensing and bonus depreciation let you deduct qualifying equipment in the year it is placed in service instead of over its useful life. For 2026, Section 179 covers up to $2,560,000 of qualifying purchases, phasing out once total purchases exceed $4,090,000. Bonus depreciation, permanent at 100 percent for qualified property acquired and placed in service after January 19, 2025 under the 2025 tax law, has no dollar cap and can create a business loss, which Section 179 cannot. The deeper mechanics live on our bonus depreciation guide.

Charitable giving and bunching

If you give regularly, "bunching" several years of planned giving into one high-income year, often through a donor-advised fund, concentrates the deduction where it is worth the most, while you still distribute the funds to charities on your normal schedule over following years. Donating appreciated stock instead of cash adds a second benefit: you deduct the fair market value and avoid the capital gains tax you would have owed on a sale.

MoveAccelerate income

Works Best WhenThis year is a low-income year

DeadlineDecember 31 (invoice and collect)

MoveDefer income

Works Best WhenThis year is a high-income year, next year lower

DeadlineDecember 31 (delay invoicing to January)

MoveEquipment purchase (Section 179 / bonus)

Works Best WhenYou need the equipment and want the deduction now

DeadlinePlaced in service by December 31

MoveRetirement plan funding

Works Best WhenYou want to shelter income at your marginal rate

DeadlinePlan established by December 31; some contributions extend to the filing deadline

MoveCharitable bunching

Works Best WhenYou give regularly and want to concentrate the deduction

DeadlineContribution made by December 31

MoveQ4 estimated payment

Works Best WhenAlways, to avoid an underpayment penalty

DeadlineJanuary 15 of the following year

Move	Works Best When	Deadline
Accelerate income	This year is a low-income year	December 31 (invoice and collect)
Defer income	This year is a high-income year, next year lower	December 31 (delay invoicing to January)
Equipment purchase (Section 179 / bonus)	You need the equipment and want the deduction now	Placed in service by December 31
Retirement plan funding	You want to shelter income at your marginal rate	Plan established by December 31; some contributions extend to the filing deadline
Charitable bunching	You give regularly and want to concentrate the deduction	Contribution made by December 31
Q4 estimated payment	Always, to avoid an underpayment penalty	January 15 of the following year

Want these moves modeled against your actual numbers?

A free initial consultation covers your projected income, which levers apply, and the order to execute them in before December 31.

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Worked Dollar Example

A consulting firm's October decision, in numbers

Hypothetical, illustrative round numbers. In October, a consulting firm projects $250,000 of net profit for the year. At an illustrative combined 35 percent effective rate, that is roughly $87,500 of tax.

Projected net profit before planning$250,000

Equipment identified and placed in service by December 31($150,000)

Taxable income after Section 179$100,000

Tax at 35 percent effective rate$35,000

Tax reduced from $87,500 to$35,000

The firm needed the servers and workstations anyway. Moving the purchase and installation into November instead of the following spring did not create a deduction out of nothing, it accelerated a deduction the business was going to earn eventually into the year it was worth the most.

Key Insight

A large fourth-quarter deduction like this usually shifts other numbers too: it can lower the Q4 estimated payment, change an S corp owner's reasonable salary math, or affect a safe-harbor calculation. Recheck your estimated tax payments after any move this size, not just at filing time.

Documentation You Need

What to have ready before your CPA can execute these moves

Income and projections

Year-to-date profit and loss statement
Estimated tax payments made so far, with dates
Prior-year tax return, for the safe harbor calculation

Equipment and retirement

Equipment vendor quotes with expected delivery dates
Current retirement plan documents, or plan type under consideration
W-2 wage history if an S corp reasonable-salary review is needed

If charitable bunching is part of the plan, add the cost basis and acquisition date for any appreciated stock you intend to donate. Documentation matters here specifically: the IRS scrutinizes large, end-of-year charitable deductions more than routine giving.

Implementation Checklist

The condensed version, by category

Run a year-end profit and loss forecast and compare it to last year

Decide, deliberately, whether to accelerate or defer income based on the projection

Confirm equipment purchases are ordered with a realistic December delivery date

Establish or fund retirement plan contributions before December 31

Execute any planned charitable giving, including bunching, before December 31

Recalculate the Q4 estimated tax payment after any large deduction, due January 15

Confirm S corp payroll wages are reasonable and properly run through December

Gather documentation now so tax preparation in the new year is not a scramble

Frequently Asked Questions

Year end tax planning for business owners

October, if you want every strategy on the table. That gives roughly 90 days to model scenarios, order equipment with enough lead time to place it in service, and coordinate retirement plan decisions before the December 31 cutoff. Contacting a CPA in November still leaves meaningful room. By mid-December, equipment and retirement plan options are mostly gone, though charitable giving and final estimated payments are still workable.

Your Q4 Window Is Open Now

A free initial consultation gets a concrete year-end plan on the calendar, before December 31 closes the door on this year's options.

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