By The clock ticks on your 2026 tax deductions. Fortunately, six straightforward year-end business strategies can help you reduce taxable income and keep more money in your pocket.
1. Prepay business expenses. If you use cash-basis accounting, IRS safe-harbor rules generally allow you to deduct qualifying expenses prepaid up to 12 months in advance. Consider prepaying rent, equipment leases, or business insurance before December 31.
2. Delay customer billing. Cash-basis businesses can postpone billing customers, clients, or patients until January. This shifts income into 2027, postponing the related taxes.
3. Buy business equipment. Do you need computers, machinery, furniture, or office equipment? Qualifying purchases placed in service before December 31 qualify for 100 percent bonus depreciation or Section 179 expensing.
4. Use credit cards strategically. Business expenses charged before December 31 to your credit card (if you’re a sole proprietor) or your corporation’s credit card are deductible in 2026. If you operate as a corporation and use your personal credit card, the corporation must reimburse you by December 31 to claim the deduction.
5. Claim every legitimate deduction. Don’t overlook expenses simply because they create a business loss. Qualifying net operating losses may provide valuable deductions in future years.
6. Deduct building improvements. Certain improvements to non-residential buildings qualify for immediate expensing through bonus depreciation or Section 179, rather than depreciation over 39 years.
Key point. Small changes in your December business activities can produce substantial tax savings.
If you want to discuss any of the above, please call me directly at 408-778-9651