Tax

Year-End Tax Planning Checklist for SMB Owners

The 15-item checklist of things to confirm or do by December 31 to optimize your tax position. Updated annually.

By Aparna Devalla, CPA4 min · 5 slidesUpdated June 15, 2026

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Review YTD income against prior year. Is this a high-income year or low? Different strategies follow.
If high-income: consider deferring December billing into January (if cash-basis), accelerating deductible expenses, maxing retirement contributions.
If low-income: consider accelerating income, converting traditional IRA to Roth at lower bracket, harvesting capital gains.
Confirm Q4 estimated tax payments will hit the safe-harbor threshold (100% / 110% of prior-year tax).

Solo 401(k): plan MUST be established by December 31. Funding can be later (up to extended return due date), but the plan must exist.
Defined benefit / cash balance plan: same — establish by year-end if you want this year's contribution.
SEP-IRA: more flexible — can be both established and funded up to extended return due date.
Required Minimum Distributions (RMDs) — for owners 73+, take by December 31 or face 25% penalty on the missed amount.

Section 179 and bonus depreciation: assets must be PLACED IN SERVICE by December 31. 'Placed in service' = ready and available for intended use, not just ordered.
Bonus depreciation rate is 20% for 2026 (phasing down: 40% in 2025, 0% in 2027 absent legislation). Equipment decisions hinge on this.
Section 179: up to $1.22M (2024 limit), phased out above $3.05M of purchases.
Consider Augusta Rule events held before December 31 — fee-only, document well.

S-corp owners: review YTD W-2 wages vs reasonable comp benchmark. Last bonus runs in December should bring you to the reasonable comp target.
Document the reasonable comp analysis with BLS data, industry surveys, hours worked.
C-corp owners: review whether to bonus out December profit (reducing C-corp tax) or retain.
Partnership / LLC: review guaranteed payment levels and capital account positions.

Charitable giving: cash, appreciated stock, donor-advised funds, qualified charitable distributions (QCDs) from IRA for 70.5+ owners.
Section 1099 readiness: confirm W-9s on file for every 1099 contractor paid $600+ in the year.
Estimated state tax payments — pay by 12/31 to deduct on the current year's federal Schedule A if itemizing (subject to SALT cap).
Capital gain / loss harvesting: review portfolio, sell losers, offset gains. Watch the wash-sale rule (30 days each direction).
Tax-loss carryforward review, NOL planning, basis tracking updates.
Need help running this checklist for your business? Rubric Financial includes year-end planning meetings with every tax engagement — typically in October–November.

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Payroll

One remote employee in another state means new tax registrations, withholding rules, and compliance work. Here's the playbook.

Need help applying this to your business?

Talk to a partner at Rubric Financial — one business day response. We'll scope a plan tailored to your situation, with a fixed monthly fee.