As a small business owner, paying yourself properly isn’t just about taking money out —…
December 31 is closer than it feels. Most of the levers that lower your 2026 tax bill have to be pulled before year-end, so November is the time to act. Here is what we’re reviewing with our clients at Oak City Accounting:
1. Max out retirement contributions
The 401(k) deferral limit is $24,500 for 2026, with an $8,000 catch-up at 50+ and $11,250 for ages 60-63. For practice owners, this is also the time to look at profit-sharing or cash balance plan contributions.
2. Use your HSA
Limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up at 55+. Contributions are deductible, grow tax-free, and come out tax-free for medical expenses.
3. Time your equipment purchases
100% bonus depreciation is permanent for qualifying property acquired after January 19, 2025, and the Section 179 limit is $2.56 million for 2026. The key detail is that equipment must be placed in service by December 31, not just ordered. Practice owners planning new imaging, dental, or office technology should check the timing now.
4. Review your income and expense timing
Where it makes sense, defer income into 2027 and accelerate deductible expenses into 2026. Also check that your owner compensation and estimated payments line up with where the year is actually landing.
5. Confirm your QBI deduction
The 20% qualified business income deduction can be affected by wages, income thresholds, and entity structure. A mid-November look can prevent a surprise in April.
6. Make charitable and family gifts
Annual gifts of up to $19,000 per recipient are excluded from gift tax. If you give to charity, consider appreciated assets or a donor-advised fund for added tax efficiency.
7. Review your entity structure
Pass-through entity tax elections and S corp reasonable compensation are worth a second look before the year closes.
The right moves depend on your income, entity type, and goals, and that is why a short planning conversation in November can be worth far more than a rushed one in late December.
If you’d like us to take a look at your situation, fill out the contact form on our website. We’re booking year-end planning reviews now.
