Tax planning
The Q4 Tax Planning Checklist for Growing Companies
Ten moves to make before December 31 that can meaningfully lower your 2026 federal, New York State and New York City tax bill.
Published: 3 min read
The fourth quarter is the last window to change your tax outcome for the year. Once the calendar turns, most of the levers disappear and your accountant is left reporting history instead of shaping it. Here is the checklist we walk through with every client between October and mid-December.
1. Get a reliable year-to-date picture
Planning only works on accurate numbers. Close your books through September (ideally October) and project the remaining months. Without a realistic estimate of taxable income, every other decision on this list is guesswork.
2. Revisit your reasonable salary if you are an S-corp owner
S-corp owners must pay themselves a reasonable salary before taking distributions. Too low invites IRS scrutiny; too high wastes payroll tax. Q4 is the time to true up salary with a final payroll run, because a W-2 cannot be fixed after year end.
3. Elect the New York Pass-Through Entity Tax (PTET)
For partnerships and S-corps with New York owners, the PTET lets the entity pay state income tax and deduct it federally, working around the $40,000 SALT cap for many owners. The annual election for 2027 is due by March 15, but estimated PTET payments made by December 15 affect your 2026 federal deduction.
If you have been paying New York personal estimated taxes instead of PTET, compare both scenarios now. For profitable owners the federal savings are often five figures.
4. Time your equipment purchases
Assets placed in service by December 31 can qualify for Section 179 expensing or bonus depreciation. That laptop refresh, kitchen buildout or vehicle purchase may produce a full deduction this year if it is delivered and in use before year end, not just ordered.
5. Accelerate expenses and defer income (when it makes sense)
Cash-basis taxpayers can prepay certain expenses and delay invoicing in late December. This is valuable when you expect lower rates next year, but it is not automatic: if 2027 looks more profitable, the opposite strategy may be better.
6. Claim the R&D credit
Software development, product engineering and process improvement often qualify for the federal research credit. Startups with less than $5 million in gross receipts can apply up to $500,000 a year against payroll taxes, even with no income tax due.
7. Fund retirement plans
A Solo 401(k) or SEP-IRA can shelter significant income for owners. Solo 401(k) plans generally must be established by December 31 for employee deferrals, while SEP contributions can be made up to the filing deadline.
8. Review multi-state exposure
Remote employees and growing sales can create income tax nexus in new states. Identify those states now so you can register, withhold correctly and avoid penalties when returns are filed.
9. Clean up your balance sheet
Write off uncollectible receivables, reconcile inventory and record accruals. A clean balance sheet supports the deductions you claim and makes the return faster and cheaper to prepare.
10. Book a planning meeting
The highest-value hour you will spend with your accountant all year is a Q4 planning session. Bring your projections, your plans for next year and your questions.
| Deadline | What is due |
|---|---|
| December 15 | Q4 corporate estimated tax and PTET estimates |
| December 31 | Assets in service, Solo 401(k) setup, final payroll |
| January 15 | Q4 individual estimated tax payment |
| March 15 | S-corp and partnership returns, 2027 PTET election |
Northline clients receive a written year-end plan in November with every recommendation quantified. If you would like one, book a consultation.
