What Southlake business owners can still do before December 31 to lower what they owe in April, with the 2026 limits and deadlines in one place.
Most business owners I talk to in November tell me the same thing: they know they should do something before December 31, and they do not know what. The good news is that you still have time, and a handful of decisions made now can change what you owe in April. Here is what I look at with my clients, in the order I look at it.
2026 numbers at a glance
Section 179 limit: $2.56 million
Bonus depreciation: 100%, permanent for qualifying property acquired after January 19, 2025
401(k) / Solo 401(k) employee deferral: $24,500, plus $8,000 at age 50+ ($11,250 at ages 60 to 63)
Solo 401(k) or SEP IRA total: up to $72,000
HSA: $4,400 self-only, $8,750 family
1099-NEC threshold: $2,000 for payments made in 2026
Key dates: December 31, 2026 (equipment, Solo 401(k) setup, charitable gifts), January 15, 2027 (Q4 estimate), February 1, 2027 (W-2s and 1099-NECs), May 17, 2027 (Texas franchise tax)
Start with your books
A plan is only as good as the numbers under it. Reconcile every bank, credit card, and loan account through October, and make sure personal and business spending are not mixed together. Then compare your profit and loss statement to what you expected. If you are behind, say so now. Catching up in November means we plan from real numbers instead of guesses.
Estimate what you will owe
Next, project your income for the full year. Are you ahead of last year or behind? Did you have a large sale, a new hire, or a big purchase? That projection answers the two questions I hear most: will I owe more than I expect, and have I paid enough in estimated tax to avoid a penalty. Your fourth quarter estimated payment for 2026 is due January 15, 2027, so knowing the number in November gives you time to set the cash aside.
Look at the timing of income and expenses
If your business uses the cash method, income generally counts when you receive it and expenses count when you pay them, including a business credit card charge made before December 31. So ask which purchases you were already planning and whether they belong in 2026, and whether invoices sent in early January make more sense than December based on your income this year compared to next.
I never recommend spending money only to save tax. A dollar spent is still a dollar gone. The goal is to buy what you need at the time that works best for you.
Equipment and vehicles
For 2026, the Section 179 deduction limit is $2.56 million, and 100% bonus depreciation is now permanent for qualifying property acquired after January 19, 2025. In plain terms, many small businesses can deduct the full cost of qualifying equipment in the year they buy it. The key phrase is placed in service: the item generally has to be bought and ready for use in your business by December 31, not just ordered. Vehicles have their own weight and business-use rules, so talk to me before you sign at the dealership. For heavy SUVs, the 2026 first-year Section 179 limit is $32,000.
Retirement contributions
Retirement contributions are one of the strongest year-end moves because you save for your future and lower this year’s tax at the same time. For 2026, you can defer up to $24,500 into a 401(k) or Solo 401(k), plus $8,000 more if you are 50 or older. If you turn 60 to 63 in 2026 and your plan allows it, the catch-up is $11,250 instead. Total contributions to a Solo 401(k) or SEP IRA, including the employer portion, can reach $72,000.
Timing matters. A Solo 401(k) generally has to be set up by December 31 to make employee contributions for 2026, while a SEP IRA can usually be opened later, up to your filing deadline. If you have employees, the plan you choose affects what you must offer them, which I covered in my September post on SEP IRAs and Solo 401(k)s.
How you pay yourself
If your business is an S corporation, make sure your owner salary is reasonable and your payroll is current. The IRS looks closely here. Ask also whether your entity type still fits the business you have today. And bring the 20% qualified business income deduction into your projection. It is permanent now, and how much you can take depends on your income, your type of business, and how you pay yourself.
Paperwork to handle before January
Collect a W-9 from every contractor now. For payments made in 2026, you generally need to issue a 1099-NEC at $2,000 or more, up from $600 in prior years. W-2s and 1099-NECs are due February 1, 2027.
If you are eligible for a health savings account, the 2026 limit is $4,400 for self-only coverage and $8,750 for family coverage, and you can contribute until April 15, 2027.
Charitable giving
Charitable gifts count for 2026 if they are made by December 31, so gather your receipts and acknowledgment letters. New for 2026: if you itemize, only the portion of your gifts above 0.5% of your adjusted gross income is deductible, and C corporations can deduct only giving above 1% of taxable income. If you take the standard deduction, you can now deduct up to $1,000 in cash gifts to qualifying charities, or $2,000 if married filing jointly.
Dates to write down
December 31, 2026 is the deadline for most of what is above: equipment placed in service, a Solo 401(k) set up, and charitable gifts. January 15, 2027 is your fourth quarter estimated payment. February 1, 2027 is W-2s and 1099-NECs. Your Texas franchise tax report is due May 17, 2027. Because Texas has no state personal income tax, the federal moves above do most of the work, and the franchise tax report is the main state filing to plan for.
Frequently asked questions
What is the 1099-NEC threshold for 2026?
$2,000 for payments made in 2026, up from $600.Do I need to set up a Solo 401(k) by December 31?
Generally yes, to make employee contributions for 2026. A SEP IRA can usually be opened later, up to your filing deadline.Does equipment I order in December count for 2026?
Only if it is placed in service, meaning bought and ready for use in the business, by December 31.
These are general guidelines, not advice for your specific business. Limits and eligibility depend on your situation. If you want to know what applies to you, book an initial consultation. Bring your year-to-date profit and loss statement and last year’s return, and I will tell you what I see.
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