Tax preparation looks back. Tax planning looks ahead, and for the 2026 tax year, the window to look ahead closes on December 31. After that, most of your options are gone and your return simply reports what already happened.
If you run a business, work for yourself or had a big change this year, a few hours of planning in November and December can mean fewer surprises in April. Here is where to start.
1. Know where you stand today
You cannot plan around a number you do not know. Before you make any decisions, pull together:
- Last year’s tax return
- Your year-to-date income: pay stubs, or a profit and loss report for your business
- Estimated tax payments you have made so far this year
- Retirement account statements
- A list of large expenses you are planning, for the business or at home
If your books are behind, catching them up is step one. A projection built on incomplete numbers is only a guess. Our accounting and bookkeeping team can help you get current quickly.
2. Look at the timing of income and expenses
For many small businesses that use cash-basis accounting, when you send an invoice or pay a bill decides which year it counts in. If 2026 has been a strong year and you expect 2027 to be quieter, or the other way around, timing can shift income and deductions between the two.
This is not about delaying payment from customers you need to keep cash flowing, or prepaying expenses you cannot afford. It is about making the timing a decision instead of an accident.
3. Think about planned purchases now
If you already plan to buy equipment, a vehicle or software for the business early next year, talk to us before December 31. Assets you buy and place in service before year-end may be deductible this year rather than spread over several years, depending on the asset and the elections you make. Maryland has its own rules for some of these deductions, so a federal deduction does not always carry over to your state return in the same way.
One caution: buying something you do not need just to get a deduction rarely makes financial sense. The goal is to time purchases you were going to make anyway.
4. Review retirement contributions
Contributing to a retirement plan is one of the most common ways for business owners and the self-employed to lower their tax bill while saving for the future. Rules and deadlines differ by plan type, and some options must be in place before the year ends. Check now which plans are open to you for 2026, how much room you have left, and whether a different setup would fit your business better next year.
5. Get payroll and contractor paperwork ready
January is a busy month for employers. Use December to:
- Confirm employee names, addresses and Social Security numbers in your payroll system
- Collect a Form W-9 from every contractor you paid this year, so you are not chasing details in January
- Check that tips and overtime are being tracked correctly for the new W-2 reporting rules (we covered this in our W-2 tips and overtime guide)
2026 Forms W-2 are due to employees by February 1, 2027, because January 31 falls on a Sunday. If you would rather hand this off, our payroll service covers year-end reporting.
6. Check your estimated payments
If you have income without withholding, such as self-employment, rental or investment income, you may need to make quarterly estimated payments. If this year’s income is higher than you expected, adjusting your final payment can help you avoid an underpayment penalty and a large balance due in April.
Key dates for calendar-year filers
- December 31, 2026: last day for most year-end moves
- January 15, 2027: fourth-quarter 2026 estimated payment due
- February 1, 2027: 2026 Forms W-2 due to employees
- April 15, 2027: 2026 return deadline and first-quarter 2027 estimated payment due
Is a year-end review right for you?
It is worth an hour if you owed more than you expected last April, your income changes a lot from year to year, you run a business or have self-employment income, or you are planning a major purchase, sale or life change.
HAMTOCK Consulting offers a year-end planning meeting for individuals and businesses in Silver Spring and across Montgomery County. We run the numbers, project your 2026 tax, and help you choose which moves make sense before December 31. Learn more about our tax planning service, call us at 240-432-2749 or email contact@hamtock.com. We reply to consultation requests within one business day.
This article is general information, not tax advice for your specific situation. Rules are current as of October 2026; talk with us before acting.
