Annual checklist (refreshed for 2026)

Year-End Tax Planning Checklist: 2026 Edition

Twenty-five action items to optimize your tax position before December 31. Organized by income tier, entity type, and personal situation.

Best for: Small business owners and high-net-worth individuals. Best worked through in October–November with your CPA, with December 31 as the action deadline for most items.

Print-friendly, use your browser's print button.

Universal SMB items (8)

□ Project YTD income vs. prior year: high or low? Different strategies follow.
□ If high-income year: defer December billing (cash basis), accelerate deductible expenses, max retirement contributions.
□ If low-income year: accelerate income, convert traditional IRA to Roth, harvest capital gains at lower bracket.
□ Confirm Q4 estimated tax payments will hit the safe harbor (100% / 110% of prior year, or 90% of current year).
□ Equipment purchases: Section 179 and 100% bonus depreciation (permanently restored by OBBBA). Must be PLACED IN SERVICE by 12/31.
□ 1099-NEC readiness: confirm W-9s on file for every contractor paid $600+ this year.
□ State estimated tax payments: pay by 12/31 to deduct on current-year Schedule A if itemizing (subject to the SALT cap).
□ Charitable giving: cash, appreciated stock, and donor-advised funds. Consider bunching to itemize.

Retirement plan items (7)

□ Solo 401(k): the plan MUST be established by 12/31 to count for the current year (funding can be later).
□ Defined benefit / cash balance plan: same establishment deadline of 12/31.
□ SEP-IRA: more flexible, since you can both establish and fund it up to the extended return due date.
□ Required Minimum Distributions (RMDs): for owners 73 and older, take by 12/31 or face a 25% penalty.
□ Roth conversion: in lower tax bracket years, convert traditional to Roth (no income limit on conversions).
□ Backdoor Roth: non-deductible traditional IRA contribution plus immediate conversion to Roth. Confirm the pro-rata rule.
□ Mega Backdoor Roth: available if your 401(k) plan allows after-tax contributions and in-service conversion.

S-corp specific (5)

□ Run YTD owner W-2 wages vs. the reasonable comp benchmark. Bring wages up via a December bonus run if needed.
□ Document the reasonable comp analysis with BLS data, a role description, and hours worked.
□ Owner health insurance: confirm it is included in W-2 Box 1 (for more-than-2% shareholders).
□ Accountable plan reimbursements: submit Q4 expense reports before year-end.
□ Confirm the S-corp election is still in force; review IRS records.

Real estate items (3)

□ Cost segregation study on any property placed in service this year, to accelerate Year 1 deductions.
□ §469(c)(7)(A) election: confirm it is filed if claiming REPS this year.
□ 1031 exchange: 45-day identification and 180-day closing for any Q3/Q4 sales.

High-income individual items (2)

□ ISO exercise model: calculate the optimal annual exercise amount, staying below the AMT inflection point.
□ Capital gain/loss harvest: sell losers to offset gains. Watch the wash-sale rule (30 days in each direction).

Stuck on a step

Checklists cover the common path.

The exceptions are where owners get hurt, and an exception is exactly the thing a list cannot tell you that you are standing in. Bring the line you stopped on and we will tell you whether it needs handling or ignoring.

Fifteen minutes with a CPA, no obligation attached to it. Or send the question in writing.

Back to all free checklists

Year-End Tax Planning Checklist: 2026 Edition