For a small business, year-end tax planning is most useful before December 31—not after the books are closed and the return is ready to file. A few well-timed reviews can help business owners spot missing records, avoid payroll surprises and make better-informed decisions while there is still time to act.
The right steps depend on your entity type, accounting method, income, payroll and New York filing requirements. Use this checklist as a starting point for a conversation with your tax professional.
1. Bring your bookkeeping up to date
Tax planning begins with reliable numbers. Before estimating income or discussing deductions, reconcile business bank and credit-card accounts through the most recent month available.
Review:
- outstanding customer invoices and unpaid vendor bills;
- loans, owner contributions and owner distributions;
- inventory and major equipment purchases;
- payroll reports and payroll-tax deposits;
- transactions that may have been paid personally; and
- expenses that may have been recorded twice or placed in the wrong category.
Accurate books make it easier to estimate taxable income and compare the current year with the prior year. If your records are behind, our bookkeeping and accounting services can help you catch up before tax season.
2. Revisit estimated taxes and cash flow
An increase in profit, a new contract, a large capital gain or a change in owner compensation can make earlier estimates outdated. Review federal and New York payments already made and compare them with the business’s current results.
Individuals generally have a fourth 2026 estimated-tax installment due January 15, 2027. Corporations and pass-through entities may follow different federal and New York rules, and some entities may have separate payment obligations for nonresident owners or other taxes. Do not assume that last year’s payment schedule still fits this year’s facts.
The goal is not simply to pay the smallest amount in December. It is to understand expected liability, preserve operating cash and reduce the chance of an avoidable underpayment surprise.
3. Review payroll and owner compensation
Year-end payroll corrections are easier to address before Forms W-2 and payroll returns are finalized. Confirm that wages, withholding, retirement contributions and taxable fringe benefits have been reported correctly.
For an S corporation, the IRS requires reasonable compensation for a shareholder-employee who provides services to the business before non-wage distributions are made. Reasonable compensation depends on the actual work performed and the surrounding facts; it is not a one-size-fits-all number.
Also review shareholder health-insurance treatment, reimbursements and any personal expenses paid by the company. If another provider processes your payroll, coordinate corrections early. Learn more about our after-the-fact payroll reporting support.
4. Evaluate purchases before spending money
A planned equipment or software purchase may affect the current year’s return, but timing and deductibility depend on the facts. In many cases, an asset must be placed in service—not merely ordered or paid for—before it can qualify for current-year depreciation.
Section 179, bonus depreciation and regular depreciation can produce different results. The best choice may depend on profitability, business use, financing and expected income in later years. A tax deduction should support a sound business purchase; it should not be the only reason to spend cash.
5. Organize contractor and vendor records
Collect a completed Form W-9 from each applicable contractor before year-end rather than chasing information during January. Review payment totals, legal names, tax identification numbers and payment methods so required information returns can be prepared accurately.
Businesses should also review whether any worker has been treated as an independent contractor when the working relationship may resemble employment. Worker classification depends on control and the actual relationship, not just the label used in an agreement.
6. Review retirement and employee-benefit options
Retirement plans can support both the owner and employees, but plan-establishment and contribution deadlines vary. Eligibility, nondiscrimination rules and payroll coordination may also affect the available options.
If you are considering a SEP IRA, SIMPLE IRA, solo 401(k) or another qualified plan, discuss it with the appropriate tax and retirement-plan professionals before year-end. Waiting until the return is being prepared may eliminate choices that required earlier action.
7. Check New York business obligations
New York businesses may have obligations beyond the federal income-tax return. Depending on the entity and its activities, the year-end review may include corporation franchise tax, partnership or LLC filing fees, sales tax, payroll withholding, MCTMT and payments for nonresident owners.
Confirm that the business’s legal name, address and ownership records are current and that all required filing accounts remain accessible. Keep notices and online payment confirmations with the tax records rather than relying only on bank activity as proof.
8. Plan the tax return before filing season
Create a short list of changes that occurred during 2026: new owners, new employees, new states, major purchases, real-estate activity, financing, retirement contributions or changes in business structure. These facts can affect what documents are needed and which returns must be filed.
Our team includes a Certified Public Accountant (CPA) and an Enrolled Agent (EA). We help Port Washington and Nassau County business owners with business tax preparation, bookkeeping and year-round tax planning.
Want to review your business before year-end? Schedule a consultation or call (516) 336-3316.
Go Tax Dude, Inc.
8 Maple St #11
Port Washington, NY 11050
Official resources
- IRS Publication 583: Starting a Business and Keeping Records
- IRS: S corporation compensation and medical insurance issues
- New York State: Estimated tax requirements for corporations
- New York State: Business tax resources and filing calendar
This article provides general information and is not tax, legal or financial advice for your specific situation.