October 2026
A Year-Round Strategy Guide
Most business owners think about taxes when an estimated payment is due and again in the spring when their CPA asks for paperwork. By that point, most of the decisions that shape the tax bill have already been made. Tax planning for business owners works best as a habit you keep all year, with a few regular check-ins that keep you ahead of surprises.
This guide lays out what to look at each quarter, the bigger decisions worth revisiting every year, and how to build a simple tax calendar with your CPA.
Your tax return reports what already happened during the year. The best time to change the outcome is while the year is still in progress. Year-round tax planning for small business owners helps you:
All of this depends on accurate, up-to-date books. If yours have fallen behind, our bookkeeping team can help you catch up.
Quarterly tax planning gives you four natural times to check in. Each one lines up with an estimated tax payment, so you’re already looking at your numbers anyway.
Q1 (January to March): Close out last year and set the plan
Q2 (April to June): Check your progress
Q3 (July to September): Look ahead to year end
Q4 (October to December): Make your year-end moves
To avoid an underpayment penalty, your estimated payments and withholding generally need to cover at least 90% of this year’s tax or 100% of last year’s tax. That second figure rises to 110% if your adjusted gross income was over $150,000.
Large purchases deserve extra attention. For 2026, businesses can expense up to $2,560,000 of qualifying equipment under Section 179, and 100% bonus depreciation is now permanent for qualifying property acquired after January 19, 2025. Your CPA can help you decide whether taking the full deduction this year is the right call.
How your business is set up has a big effect on how much tax you pay. A structure that made sense when you started may not fit the business you have today.
Sole proprietors and single-member LLCs pay Social Security and Medicare taxes (self-employment tax) on all of their net profit.
S corporation owners pay themselves a reasonable salary through payroll, and the remaining profit isn’t subject to self-employment tax. The trade-off is added payroll costs and a separate business return, so the savings need to outweigh the extra cost.
The qualified business income (QBI) deduction lets many business owners deduct up to 20% of their business income. Congress made it permanent in 2025.
Minnesota’s pass-through entity (PTE) tax lets S corporations and partnerships pay state income tax at the business level, which can help owners get around the federal limit on deducting state and local taxes. In May 2026, Minnesota extended the election through tax year 2027.
Review your structure once a year and anytime your profit changes significantly. Our tax advisory services include an entity review, so you know whether a change would actually save you money.
Retirement plans
A retirement plan is one of the easiest ways to lower your taxable income while saving for your own future. The right one depends on your profit and whether you have employees.
Solo 401(k): for owners with no employees other than a spouse. You can contribute as both the employee (up to $24,500 in 2026) and the employer.
SEP IRA: simple to set up and funded by the business. You can contribute up to 25% of compensation, capped at $72,000 for 2026, but you must contribute the same percentage for eligible employees.
SIMPLE IRA: for businesses with 100 or fewer employees. Employees can defer up to $17,000 in 2026, and the business makes a small contribution.
Traditional 401(k): more flexible for growing teams, with higher setup and administration costs.
Owners age 50 and older can add catch-up contributions, including an extra $8,000 to a 401(k) for 2026, or $11,250 for those ages 60 to 63.
Health insurance
Self-employed owners can usually deduct health insurance premiums for themselves, a spouse, and dependents. If you own more than 2% of an S corporation, the premiums need to be included in your W-2 wages through payroll to be deductible, a step that’s easy to miss.
If you’re on a high-deductible health plan, a health savings account (HSA) adds another deduction. For 2026, you can contribute up to $4,400 for self-only coverage or $8,750 for family coverage, plus $1,000 more if you’re 55 or older.
Other benefits worth a look
A home office deduction if you run the business from home
An accountable plan, which lets an S corporation reimburse owners for business expenses they pay personally
The everyday write-offs covered in our guide to small business tax deductions
A tax calendar keeps every deadline and planning meeting in one place. Start with these dates:
January 15: fourth estimated payment for the prior year
January 31: W-2s and 1099-NEC forms due
March 15: S corporation and partnership returns due, or file an extension
April 15: individual and C corporation returns due, plus the first estimated payment
June 15: second estimated payment
September 15: third estimated payment and extended S corporation and partnership returns
October 15: extended individual returns
December 31: last day for most deductible purchases and payments
Add your payroll deposit and Minnesota sales tax dates, then schedule four short planning meetings with your CPA, one after each quarter closes. When a date falls on a weekend or holiday, the deadline moves to the next business day.
Tax planning for businesses is a big part of what we do. Our tax advisory team meets with business owners throughout the year to project income, adjust estimated payments, review entity structure, and map out year-end moves. When it’s time to file, our tax preparation team already knows your numbers.
We work with owners across the Brainerd Lakes Area from our offices in Baxter, Pequot Lakes, and Aitkin.
Tax planning works best when someone is looking at your numbers before the year ends. If you’d like a plan built around your business, contact Lakes Area CPAs to schedule a quarterly tax planning session. We’ll review where you stand, flag the moves worth making, and set up check-ins for the rest of the year.
This article provides general information about federal and Minnesota tax law as of October 2026 and is not tax advice for your specific situation. Consult a CPA before making decisions based on this information.
What are the best tax planning strategies for businesses?
The right mix depends on your business, but a few strategies help almost everyone: keeping clean books, choosing the right entity, funding a retirement plan, and timing big purchases. Reviewing them each quarter is what makes them work.
What is quarterly tax planning?
Quarterly tax planning means checking your income, expenses, and projected tax every three months and adjusting your estimated payments and plans as needed. It keeps small problems from turning into a large bill in April.
Do I need to make estimated tax payments?
Generally, yes, if you expect to owe $1,000 or more in federal tax when you file. Most business owners without enough withholding need to pay quarterly.
How often should a business owner meet with a CPA?
Once a quarter is ideal. At a minimum, meet mid-year and again in the fall, while there’s still time to act before December 31.
Is it too late to plan for this year?
Not if the year hasn’t ended. Most moves need to happen by December 31, and a few, such as some retirement contributions, can be made up to your filing deadline.
For more tax deduction tips from the Lakes Area CPAs, follow our social media updates here.
