Most S corp year-end mistakes happen in one place: the last payroll of the year. This checklist puts the payroll items, the planning moves and the 2027 filing dates in the order you need them.
★ 5.0 on Google113 reviews1,000+ clientsAll 50 states, fully remote
Tax planning slots are limited before year-end.
An S corp owner's year-end list starts with the final 2026 payroll: catch up a reasonable salary, withhold 401(k) deferrals, add owner health insurance to the W-2, and add extra federal withholding if K-1 income is under-covered. Those items cannot be fixed after the last payroll runs.
The rest is planning and paperwork: reimburse expenses under an accountable plan, place equipment in service, check basis before distributions, then file W-2s by February 1 and the Form 1120-S by March 15, 2027.
Worked example (illustrative)
A married owner runs a non-service business (an HVAC contractor) through an S corp that will earn $500,000 before owner pay in 2026. The owner's salary is $160,000, the spouse earns $150,000 on a W-2 elsewhere, and they take the standard deduction. The company has a solo 401(k) and no other employees.
| Employee 401(k) deferral, withheld from December payroll | $24,500 |
|---|---|
| Employer 401(k) contribution: 25% of $160,000 salary | $40,000 |
| Accountable plan reimbursements (home office, mileage) | $4,800 |
| Augusta rule rent: three documented board meetings at home | $4,500 |
| QBI deduction lost because profit is lower | $9,860 |
| Taxable income, before and after (after QBI) | $540,008 to $476,068 |
| Federal tax effect: $27,558 at 35% plus $36,382 at 32% | about $21,288 |
The math includes the trade-off most calculators skip: every dollar that lowers S corp profit also lowers the 20% QBI deduction. Here the QBI deduction falls from $65,552 to $55,692.
The $24,500 deferral still owes payroll tax; the $40,000 employer contribution does not. The total of $64,500 is under the $72,000 limit for 2026.
Whether $160,000 is a reasonable salary depends on the owner's role and market pay, and this example does not test it. The Augusta rent must match what a comparable venue would charge, with minutes for each meeting.
Illustrative composite with simplified assumptions, not a client result and not a projection of what you will save. Your numbers depend on your full return.
Dated moves in deadline order. Check items off as you go, or print it.
Taxstra 2026 year-end tax checklist: S Corp Owners
taxstra.com/year-end-tax-planning-checklist/s-corp-owners/ · Last reviewed October 20, 2026 · Educational, not individualized tax advice.
0 of 18 items checked. Your checks stay in this browser only.
Decide these before the last payroll is scheduled
Most of this happens in the final 2026 payroll
January 31 falls on a Sunday in 2027
Rule changes that move this year's year-end math
Book a free 30-minute call with our team. Tell us about your S corp, learn how Taxstra works with owners, and see whether we are a good fit. Tax advice on your numbers comes after you engage us.
“I recently had the pleasure of working with Taxstra, and I must say, the experience exceeded my expectations. From start to finish, their professionalism, expertise, and customer care were outstanding.”
Published client feedback. Individual experiences vary.
Tax planning slots are limited before year-end.
Free · 30 minutes · No obligation
Tax planning slots are limited before year-end.
A free 30-minute call with our team about your needs, how we can help, and whether we are a good fit. The tax plan and any advice on your numbers come after you engage us. Pick a time below.
Loading calendar
Yes, as long as the wages are actually paid through payroll in 2026 with withholding. The catch-up shows up on your 2026 W-2. What you cannot do is record salary after the year ends and call it 2026 wages.
Employee deferrals must be withheld from 2026 paychecks, so they are due by the last 2026 payroll. The employer contribution can be deposited as late as the extended 2026 Form 1120-S due date, September 15, 2027, and still be deducted for 2026.
For a more-than-2% S corp shareholder, premiums the company pays are treated as wages for income tax (not Social Security or Medicare). Reporting them in Box 1 is what lets you take the self-employed health insurance deduction on your personal return.
Distributions are not deductible and do not change the S corp's taxable income, so timing them rarely saves tax. The year-end question is basis: a distribution above your stock basis is taxable as a capital gain.
The free 30-minute call is with our team and covers your needs, our services and whether we are a fit. Setting salary, reviewing payroll or calculating contributions is part of a paid engagement.
Want the general version? See the year-end tax planning checklist and the full list of 2026 and 2027 tax due dates.
Book a free 30-minute consultation with our team. Tell us what you need, learn how Taxstra can help, and explore whether our services are a good fit. Tax advice, document reviews, and analysis require a paid engagement.Your tax plan and specific advice come after you engage. The call is about fit and next steps.
Tax planning slots are limited before year-end.
Coordinate compensation, payroll, books, and tax returns rather than treating the election as a stand-alone form.
See how tax planning works →