By David Zaiken, CPA, and Adam Johnson, CPA  •  Published Oct. 2026  •  WebsterRogers LLP

Q4 tax planning for businesses means more than estimating taxes. Before Dec. 31, owners should review year-to-date results, project year-end income, account for One Big Beautiful Bill Act changes, and weigh each tax decision against cash flow and long-term plans, ideally reviewing them with their tax adviser.

With changes under the One Big Beautiful Bill Act greatly affecting deductions and tax strategies, businesses also need to revisit assumptions and business planning from the beginning of 2026. Decisions made before Dec. 31 can affect cash flow, investment plans, and long-term business objectives.

“The biggest mistake is failing to plan,” warns David Zaiken, CPA, WebsterRogers International and Corporate Tax Technical Leader. “Tax planning should be part of a broader business strategy, not a last-minute effort to reduce the current year’s tax bill.”

Where should Q4 tax planning start?

It starts with a tax and financial health check: a clear understanding of where the business stands today and where it expects to go over the next three to five years. That means:

• Reviewing year-to-date financial results.
• Projecting year-end income and expenses.
• Evaluating how the company’s tax position has changed.
• Revisiting changes under the Big Beautiful Bill Act, including depreciation, research and development expenses, interest deductions, and what was done in 2025 compared to the tax picture in 2026.

Some deductions available in the 2025 tax year will not be available in the same way going forward, potentially resulting in higher tax payments. Businesses should work with their tax advisers to understand what has already been claimed, what remains available, and how those changes could affect estimated payments.

“Owners should also weigh short-term cash flow needs against long-term plans,” says Adam Johnson, CPA,   WebsterRogers Hospitality Industry Group Leader. “Don’t rely on what you’ve done in the past.”

Tax advisers now have considerable flexibility to accelerate deductions and determine depreciation, but a business expecting significant growth, a major acquisition, or a potential sale may need a different tax strategy than one focused on preserving cash. Furthermore, electing to accelerate deductions could have other longer-term tax aspects that should be modeled out.

Should tax savings drive business decisions?

No. Tax savings should support a business decision, not drive it. Deciding primarily to reduce taxes is a common year-end mistake. Two examples:

• Accelerating capital expenditures. A company coming off a profitable year might buy equipment it does not need to generate deductions. The purchase may reduce current taxable income, but it also uses cash that could be invested elsewhere.
• Deferring income. Strategies that defer income recognition may provide a short-term benefit but create a larger tax burden in a future year.

The better approach is to evaluate tax decisions within the context of the company’s broader financial plans. Before deciding whether to accelerate deductions or defer income, owners should consider:

• Expected growth,
• Cash flow needs,
• Financing requirements, and
• Potential ownership changes.

“The objective is to improve the company’s after-tax financial position over time, not simply minimize taxes in a single year,” adds Zaiken. “Busy owners who are drinking from the proverbial fire hose, without a clear understanding of their own business strategy, are starting their Q4 planning at a disadvantage.”

Does your business structure still make sense?

The tax environment has changed enough that business owners should reconsider whether their current entity structure still fits. Examine the following:

• A pass-through entity, which may still align with the company’s goals.
• A C corporation structure, which may better support plans for growth, outside investment, or a future sale.
• The pass-through tax rates compared to lower C Corporation rates.
• Plans for repatriation

The decision involves more than comparing tax rates, however. Owners also need to consider how the structure affects distributions, financing, ownership, and long-term objectives.

Why review state and local taxes in Q4?

State tax rules do not always conform to federal tax law, creating differences in deductions and taxable income. Because state and local taxes make up a significant portion of many companies’ overall tax burden, this area deserves closer scrutiny. Numerous states have not conformed to the Big Beautiful Bill Act, which results in much higher state taxes as compared to federal.

How do tariffs affect year-end tax planning?

For businesses impacted by tariffs, year-end planning should include a close look at supply chain costs and profit margins. Changing tariff rates and trade policies can affect the cost of imported materials, components, and finished goods.

Business owners need to do the math on their options:

• Pass costs on to consumers
• Renegotiate contracts
• Start buying components and assembling on-site

Owners should also:

• Consider other proactive supply chain planning
• Integrate tariff and tax planning
• Understand that a coordinated approach yields value-added results

“It’s a dynamic time, and if you’re not careful, you may end up with a 10% to 20% increase in the cost of goods,” claims Johnson. “These decisions have tax implications, but they are fundamentally business decisions.”

Understanding the financial impact of tariffs can help owners choose options that support their margins and long-term objectives.

How should owners prepare for 2027 and beyond?

If the company is interested in a sale/investment or other capital markets event consider:

• Reviewing the company’s valuation and identifying issues that could affect a future transaction.
• Obtaining an accurate evaluation of what the company is realistically worth rather than relying on a back-of-the-envelope estimate.
• Revisiting estate and succession plans, particularly if considering gifts or transferring ownership interests.

Year-end preparation may include:

• Reviewing estimated tax payments and cash flow.
• Conducting a financial and tax health check.
• Reevaluating tax and tariff supply chain issues.

Zaiken added, “Owners can benefit from looking at their businesses as a prospective buyer or lender would, examining financial performance, projections, and the company’s overall outlook. Imagine your business as a public company with all the attendant requirements.”

For estimated taxes, project taxable income, determine deductible expenses, and assess how much cash you’ll need to meet tax obligations. For pass-through entities, that planning should include anticipated owner distributions.

Frequently Asked Questions

What should business owners review before year-end?

Review cash flow, tariffs, major purchases, planned investments, compensation, retirement contributions, and changes in the business that could affect tax liability.

How can recent tax law changes affect year-end planning?

New rules may change the timing or amount of deductions and other tax benefits. Businesses should revisit strategies based on the current rules rather than relying on prior-year assumptions. Long-term effects should also be reviewed.

When should I talk with my tax adviser about year-end planning?

Ideally, now. Many planning opportunities depend on actions taken before Dec. 31, so waiting until the tax return is prepared may limit options.

Should I buy equipment before year-end to lower my tax bill?

Not just for the deduction. Accelerating capital expenditures may reduce current taxable income, but it also uses cash that could be invested elsewhere. Weigh expected growth, cash flow needs, financing requirements, and potential ownership changes first.

Should I change my business entity structure?

It’s worth reviewing. The tax environment has changed enough that some owners should compare staying a pass-through entity with becoming a C corporation. The right answer depends on more than tax rates, including distributions, financing, ownership, and long-term goals.

How do tariffs affect my business’s year-end tax planning?

Tariffs can raise the cost of imported materials, components and finished goods, which affects profit margins. Owners should compare options such as passing costs to customers, renegotiating contracts, or assembling components on-site. These are business decisions with tax implications.

Next Steps

Q4 provides a valuable opportunity. By reviewing the company’s tax position, financial outlook, and strategic priorities before year-end, business owners can make more informed decisions and enter 2027 with a clearer plan.

To talk through your year-end planning, contact David Zaiken or Adam Johnson.

About WebsterRogers

WebsterRogers LLP is a South Carolina-based accounting and consulting firm founded in 1984. The firm has seven offices across the state, including one in Myrtle Beach, and more than 140 professionals who serve industries such as tourism and hospitality, construction, healthcare, and manufacturing.