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Every December, the phone rings with some version of the same call. A business owner wants to “do something about taxes” before the year closes. The equipment they need has a ten-week lead time. The retirement plan deadline passed in October. The estimated payment penalty has been quietly compounding since June. We help where we can, but by December, most of the good options are already off the table.
Consider this article the July version of that call. The one where everything is still on the table.
You have six months of real numbers behind you and six months left to act on them. And this year, the mid-year check-in matters more than usual, because 2026 is the first full tax year under the One Big Beautiful Bill Act. Depreciation, expensing, deductions, and even the state tax math all changed. If your plan still looks like last year’s plan, there’s a good chance you’re leaving money on the table.
Here are the seven moves we’re walking our own clients through right now.
1. Project your full-year income before you do anything else
Every move on this list depends on one number: what your taxable income is actually going to be this year. Not what it was last year. Not what you hope it will be. A real projection, built from six months of actuals and adjusted for how your business behaves in the second half.
If your books are current, this takes an afternoon. If your books are three months behind, that’s the real first move, and we’d rather hear about it in July than in March. Our financial services team builds these projections for clients all year, and the mid-year version is the one that drives every decision below.
2. True up your estimated payments before September 15
Here’s a question most owners can’t answer: are your estimated payments based on this year’s income, or on autopilot from last year’s?
The IRS gives you safe harbors: pay in 90% of this year’s tax, or 100% of last year’s (110% if your income was over $150,000), and you avoid the underpayment penalty. Miss both, and the penalty starts running. And the penalty is really just interest, and interest rates are not what they were a few years ago. We’ve seen owners quietly hand the IRS four figures for the privilege of paying late.
The third quarter payment is due September 15. If your projection from move #1 says you’re running hot, fix it there, not next April.
3. Plan equipment purchases around the restored write-offs
This is the section where 2026 looks genuinely different.
The new law permanently restored 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. No more phase-down math. It also raised the Section 179 expensing limit to $2,560,000 for 2026, with the phase-out not kicking in until purchases top $4,090,000. Between the two, almost any equipment a closely held business buys this year can be fully deducted in year one.
Two things to know. First, Section 179 is elected asset by asset and can’t take your business income below zero, while bonus depreciation applies automatically and can create a loss. Which tool to use on which asset is a planning decision, and it’s one we work through with clients as part of our tax compliance and planning services. Second, the deadline is “placed in service” by December 31, not “ordered.” If the machine you need ships in ten weeks, July is when that clock matters. IRS Publication 946 has the full rules, and we’re happy to translate them.
One caveat, because we’d rather lose the sale than watch you make a bad one: buying equipment you don’t need to capture a deduction is spending a dollar to save thirty-some cents. Buy what the business needs. Then let us make sure the timing works as hard as possible.
4. Check the new-law provisions you might be sleeping on
A few changes from the new law deserve a quick mid-year look even if they don’t get their own section:
The 20% QBI deduction is now permanent. No more expiration anxiety. But the wage and income limitations still apply, and a mid-year projection is exactly when you can still manage around them.
Domestic research and development costs are deductible again. If your business writes software or develops products, the forced amortization era is over. If you capitalized R\&D costs in recent years, ask us about catching up.
The SALT cap moved, but the pass-through workaround survived. The state and local tax deduction cap increased, though it phases down at higher incomes. For many S corporation and partnership owners, Missouri’s pass-through entity tax election is still the better math. It’s an annual decision, and mid-year is when we run it.
5. Look hard at owner compensation and entity structure
If you own an S corporation, your salary is supposed to be reasonable compensation for the work you do. It is not supposed to be a number someone picked in 2019 that nobody has questioned since. If profits are up meaningfully this year, your salary and distribution mix deserves a fresh look before year-end payroll closes, both to stay defensible and to make sure you’re not overpaying payroll tax.
Mid-year is also when entity structure conversations actually work. If you’ve outgrown a sole proprietorship, or your S corporation no longer fits how the business makes money, elections and conversions have deadlines and lead time. December is a bad month to discover that.
6. Use the retirement plan window while it’s still open
Here’s the deadline nobody tells you about: if you want a new safe harbor 401(k) running for this year, it generally needs to be live by October 1. Cash balance and defined benefit plans, the heavy artillery for owners who want six-figure deductions, need even more design runway. In other words, July is when you decide. December is when you wish you had.
The numbers are worth the effort. The 2026 employee deferral limit is $24,500, with more available if you’re 50 or older, and a solo 401(k) or SEP can shelter up to $72,000 depending on your compensation. For a profitable closely held business, a well-designed plan is routinely the single largest deduction on the return, and it’s the rare one where the money stays yours.
7. Clean up the books now, not in January
Nobody’s favorite section. Everybody’s highest-return hour.
Reconcile the bank and credit card accounts. Update the fixed asset and loan schedules. Make sure the mileage log is a log and not a January reconstruction project. And collect W-9s from your vendors now, while they still answer your emails, not during 1099 season when everyone goes mysteriously quiet. One helpful change: starting with 2026 payments, the 1099 reporting threshold rises from $600 to $2,000, which should shrink the January pile.
Clean books are also what make moves #1 through #6 possible. If QuickBooks has drifted from reality, our technology services team spends all day fixing exactly that, from cleanup to choosing the right QuickBooks product for where your business is headed.
The hour that pays for itself
The tax code rewards people who plan ahead. It has never once rewarded panic.
Run the projection. Check the payments. Time the purchases, revisit the compensation, open the plan, clean the books. Or skip the checklist and let us run it with you: a mid-year tax check-in with our team takes about an hour, and it routinely pays for itself many times over. Contact us or call (314) 845-6680, and let’s make this the year the December phone call never happens.
Frequently asked questions
When should businesses start year-end tax planning?
Mid-year. By July you have real numbers to plan from and enough calendar left to act on them. Equipment lead times, retirement plan deadlines, and estimated payment dates all fall between now and December.
What is the Section 179 limit for 2026?
$2,560,000, with the phase-out beginning once total qualifying purchases exceed $4,090,000. And 100% bonus depreciation is available on qualifying property beyond that.
Can I still set up a retirement plan for this tax year?
Almost certainly, but the clock is running. New safe harbor 401(k) plans generally must be operating by October 1, and more complex plans need design time before that. Call sooner rather than later.
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This article is for general information only and is not tax advice. Tax figures and rules change, and how they apply depends on your specific situation. Consult your tax advisor before acting. Figures current as of July 2026.
