By: Sharon Heinz, EA

Date Posted: September 2026

Reading Time: 10 – 13 Minutes

You had a good year. Sales are up. Money is coming in. Your business is growing.

Then tax season arrives.

Your accountant tells you how much you owe.

And your first question is: “Is there anything we can do to lower it?”

Sometimes the answer is yes. But many times, the better answer would have been available months earlier.

That is the problem with waiting until tax season to think about taxes.

Tax preparation tells you what already happened. Tax planning gives you time to change what happens next.

For many small business owners, year-end tax planning should start well before December 31.

A good time for many business owners to begin serious year-end tax planning is September or October.

By then, you usually have enough financial information to see how the year is going, but there is still time left in the year to make decisions.

Your accountant can review your year-to-date numbers, estimate where your business may finish the year and identify tax issues that may need attention.

Starting earlier can also give you time to coordinate decisions involving payroll, retirement contributions, equipment purchases, estimated taxes and other business expenses.

Waiting until late December can greatly reduce your options. Waiting until your tax return is being prepared may mean the opportunity is already gone.

Many business owners think they are getting tax planning because an accountant prepares their tax return. They are not the same thing.

Tax preparation looks backward. It reports the income, deductions and other tax items that already occurred.

Tax planning looks forward. It asks what your taxable income may be, whether estimated taxes are on track, whether legitimate deductions are being missed, whether your business structure still fits, and whether owner compensation and other year-end decisions need attention.

That is a very different conversation from simply preparing a tax return.

Imagine that it is October and your business has earned much more than you expected. That is useful information because there are still a few months left to plan.

Your accountant may be able to estimate your tax liability and help you determine which actions make sense before December 31.

Now imagine discovering the same thing in March while preparing your return. Your accountant can explain the tax bill, but some planning opportunities tied to the prior year may no longer be available.

That is why we want to know what is happening while there is still time to do something about it.

Good small business tax planning starts with good numbers.

At Profit Wise Accounting & Tax, a year-end review should not begin with guessing. We want to understand how the business is actually performing.

That can include reviewing your year-to-date profit and loss statement, balance sheet, payroll, owner compensation, estimated tax payments, major purchases and other significant changes in the business.

We also want to know what you expect to happen during the rest of the year. Did you land a large new contract? Lose a major customer? Plan to buy equipment? Hire employees? Take more money out of the business? Open another location? Start a retirement plan?

Your tax plan should reflect what is actually happening in your business.

Tax planning should not become: “What can I buy so I don’t have to pay taxes?”

Spending money just to get a tax deduction does not automatically make good business sense. You still spent the money.

Instead, the goal is to make good business decisions while understanding the tax impact.

If you already need equipment, the timing of that purchase may matter. If you are considering a retirement contribution, the rules and deadlines matter. If estimated tax payments are too low, knowing that before year-end gives you more time to prepare for the cash need.

Tax planning should help your business and your tax position work together.

Year-end planning can be especially important for S corporation owners.

An S corporation shareholder who works in the business may have issues involving reasonable compensation, payroll, shareholder distributions, retirement contributions, health insurance and other owner-related transactions.

The IRS generally requires S corporations to pay reasonable compensation to shareholder-employees for services provided before treating additional payments as non-wage distributions.

These are not issues you want to discover after the final payroll of the year has already been processed.

For an S corporation owner, September or October is a good time to start reviewing the year—not December 30.

December planning is still better than no planning. But you may be working against the clock.

Payroll may need to be processed. Accounts may need to be reconciled. Retirement plan rules may need to be reviewed. Purchases may need to be completed. Estimated taxes may need attention.

Your accountant may also need clean financial records before giving you useful advice. If your QuickBooks file has not been reconciled for months, it is difficult to create a reliable tax projection from it.

Good tax planning depends on good bookkeeping.

That happens. A tax projection is based on the information available at the time.

Your business could have a huge November. A customer could fail to pay. You could hire three people or lose a contract.

That does not make tax planning useless. It means the plan should be updated when something significant changes.

For some businesses, one fall tax-planning meeting is enough. For growing or more complex businesses, tax planning may need to happen throughout the year.

If you are a small business owner, do not assume everything is fine simply because your tax return has not been filed yet.

Ask: “Based on how my business is doing this year, should we do tax planning before year-end?”

That one question can start a much more valuable conversation.

If your accountant only looks at your business once a year when preparing your tax return, you may want to ask whether you are receiving the level of proactive advice your business now needs.

There is no single date that works for every business. But for many small business owners, September and October are strong months to begin year-end tax planning.

You have enough of the year behind you to see where you are headed, and you still have time ahead of you to make informed decisions.

The goal is not simply to pay the lowest tax possible. The goal is to avoid surprises, make smarter decisions and keep more of what you earn within the rules.

At Profit Wise Accounting & Tax, we help business owners look at the numbers before the year is over. We can review your year-to-date financials, estimate your tax position and identify planning issues that should be addressed before year-end.

Plan before you file.

Schedule a Year-End Tax Planning Consultation with Profit Wise Accounting & Tax.

Sharon Heinz, Enrolled Agent

Sharon Heinz is the owner of Profit Wise Accounting. She works with small and growing businesses on tax preparation, strategic tax planning, accounting, bookkeeping, payroll, and business advisory matters, with a focus on helping business owners understand their numbers and make better-informed financial and tax decisions.

This article is intended for general educational purposes and should not be considered individualized tax, accounting, legal, or financial advice. The appropriate accounting processes, financial metrics, and planning strategies depend on each business’s specific facts and circumstances.