What's Happening?
EisnerAmper is advising business owners to engage in proactive year-end tax planning for 2026 to optimize their financial outcomes. The firm emphasizes that effective tax planning involves understanding the year's financial performance, its implications
for both business and personal tax returns, and identifying actions that can be taken before the year concludes. Key recommendations include coordinating with accounting and tax partners to review financial numbers before year-end, assessing estimated tax payments for both pass-through entities and C corporations, and exploring opportunities for income deferral, deductions, or strategic planning. Business owners are encouraged to ask ten critical questions covering topics such as business performance analysis, advisor collaboration, estimated tax adequacy, deferral/deduction strategies, financial results linkage to tax advice, proper money withdrawal methods, pre-filing actions, disclosure of major business and personal changes, cash flow for tax payments, and the creation of a clear, accountable year-end plan.
Why It's Important?
Proactive year-end tax planning is crucial for U.S. business owners to manage their tax liabilities effectively and ensure financial health. By engaging with their accounting and tax partners early, businesses can identify opportunities to reduce underpayment penalties, optimize cash flow, and make informed decisions that align with their financial goals. The distinction between pass-through entities and C corporations regarding estimated taxes highlights the complexity and individualized nature of tax planning. Understanding how money is taken out of the business—whether through salary, draws, or distributions—directly impacts payroll, cash flow, deductibility, and both business and personal taxes. Without a coordinated approach, businesses risk missing critical deadlines, incurring unnecessary penalties, or failing to capitalize on available tax benefits, which can significantly affect their profitability and long-term sustainability.
What's Next?
Business owners should schedule joint meetings with their accounting and tax partners before December 31, 2026, to review current financials, full-year forecasts, owner compensation, estimated payments, and major transactions. The goal is to develop a written plan that outlines each action, its rationale, responsible party, deadline, cash requirement, expected tax effect, and necessary documentation. This plan should also clarify what actions will not be taken and why, what remains due, and what carries into 2027. Advisors are expected to provide a clear bridge between financial results and tax advice, ensuring that all guidance is accurate, practical, and actionable. This strategic approach aims to ensure that businesses are well-prepared for their 2026 tax filings and positioned for future growth.
