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4th Quarter Tax Moves Most Business Owners Miss

September 29, 2026

For many business owners, the fourth quarter feels like the final sprint.

There are customers to serve, projects to finish, employees to manage, and plans to make for the coming year. Tax planning often gets pushed to the bottom of the list until December, or even until tax documents begin arriving the following spring.

Tax preparation looks backward. Tax planning looks forward.

Once the year closes, many decisions are already locked in. That is why the fourth quarter can be such an important planning window. It gives business owners an opportunity to review their financial picture, identify possible gaps, and coordinate decisions before deadlines limit their flexibility.

Here are several fourth-quarter planning conversations business owners frequently overlook.

1. Review Purchases Before Spending Simply for a Deduction

A common year-end strategy is to purchase equipment, vehicles, software, or technology the business already needs. Depending on the circumstances and applicable tax rules, qualifying purchases may be eligible for accelerated deductions or depreciation.

However, a deduction should not be the only reason to spend money.

Before moving a planned purchase into the current year, ask:

  • Does the business truly need the asset?
  • Will it improve productivity, capacity, or profitability?
  • Can the business make the purchase without weakening its cash reserves?
  • Will the asset be ready and placed in service when required?
  • Does it support the company's longer-term growth or succession strategy?

The purpose of tax planning is not to spend a dollar merely to save a portion of it. The better approach is to coordinate necessary investments with tax and operational goals.

2. Looking at the Timing of Income and Expenses

Business owners sometimes focus on how much income they earned without considering when that income is recognized.

Depending on the business’s accounting method and financial position, there may be opportunities to thoughtfully manage the timing of income or expenses. A cash-basis business, for example, may want to discuss whether receiving certain income this year or next year better supports its projected tax position and cash-flow needs.

Timing decisions should never be made in isolation. Delaying income may create a tax benefit in one year, but it could also restrict the cash available for payroll, inventory, expansion, debt payments, or other obligations.

The useful question is not simply, “Can this income wait?” It is, “How would the timing affect both our taxes and the operation of the business?”

3. Revisit the Company Retirement Plan

Retirement plans may offer much more than a year-end deduction. They can also help owners prepare for life beyond the business and strengthen the company’s employee benefits strategy.

The fourth quarter is a good time to review whether the existing plan still fits the organization. Consider:

  • Has the company's profitability or workforce changed?
  • Are the owner's retirement contributions aligned with long-term goals?
  • Are the family members working in the business participating appropriately?
  • Could the plan do more to attract or retain key employees?
  • Are there plan decisions or deadlines that require action before year-end?

Different retirement plan designs have different contribution rules, deadlines, costs, and employee requirements. Business owners should coordinate with their tax, financial, and plan professionals before making changes.

4. Ask Whether the Business Has Outgrown It's Structure

The legal and tax structure selected when a business began may not remain the best fit as the company becomes more profitable, adds owners, hires employees, or prepares for a transition.

Entity structure can affect how income flows, how owners are compensated, how profits are retained or distributed, and how an eventual ownership transfer may be handled. Yet many owners continue operating under a structure selected years or decades earlier without revisiting the decision.

A fourth-quarter review does not necessarily mean the structure should change. It means confirming that the structure still supports the company’s current size, profitability, ownership arrangements, and future plans. Structural changes can have significant tax and legal consequences, so the conversation should include the company’s CPA and attorney.

5. Connect Tax Planning with Succession Planning

Some of the most important tax considerations do not appear on the current year’s income statement.

If an owner expects to transfer shares, sell the company, bring family members into ownership, or fund a buy-sell arrangement, today’s decisions may affect the eventual transition. Ownership transfers, gifting strategies, trusts, insurance arrangements, and buy-sell agreements can each carry tax, legal, and cash-flow implications.

This is where tax planning becomes legacy planning.

A strategy that reduces the current tax bill but creates complications for an eventual transition may not be the best long-term solution. Business succession, estate planning, retirement planning, and tax planning should be evaluated together rather than in separate conversations.

6. Bring the Advisors Together Before December

Business owners often have several trusted professionals, but those professionals may be working from different information.

The CPA may be focused on tax exposure. The financial professional may be focused on retirement income, investments, protection, and family goals. The attorney may be reviewing estate or business agreements. A succession advisor may be considering future leadership and ownership.

Each perspective matters. The opportunity is to bring them together before a major decision is made.

A coordinated fourth-quarter conversation can begin with updated financial information and a few practical questions:

  • What has changed in the business this year?
  • What decisions must be completed before year-end?
  • What can be addressed next year?
  • How will each recommendation affect cash flow?
  • Does the strategy support the owner's eventual exit and legacy goals?

Year-end decisions are stronger when the advisors are working toward the same goal.

Do Not Plan for Taxes. Plan for What Comes Next.

The goal of fourth-quarter planning is not simply to find deductions.

It is to make deliberate decisions while options may still be available. The right strategy should consider the company’s cash flow, capital needs, workforce, retirement goals, ownership structure, succession plan, and the people who depend on the business.

Tax laws, contribution limits, deadlines, and eligibility requirements can change. Before implementing a strategy, consult qualified tax and legal professionals who understand your specific circumstances.

At Legacy Planning Services, we help business owners look beyond isolated financial decisions and consider how tax planning fits into the broader picture of business continuity, succession, family impact, and legacy. If you have been meaning to bring your advisors together, the fourth quarter is a good time to begin the conversation.

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