Year-End Tax Moves for Florida Business Owners: 2026 Checklist

Tax planning has a deadline, and for most strategies it's December 31. On January 1, the year is locked in, and the best your CPA can do is report what already happened. For Florida business owners, with no state income tax to plan around, the year-end window is where federal savings are won or lost.

Here's the checklist to work through in October, November and December.

1. Should I buy equipment before December 31?

If you were going to buy it anyway, buying and placing it in service before year-end can pull the entire deduction into 2026. For 2026, the Section 179 limit is $2.56 million, and 100% bonus depreciation is available for qualifying property acquired after January 19, 2025.

• The asset must be placed in service by December 31, not just ordered.
• Financed purchases count. The deduction is based on the cost, not the cash you paid.
• Heavy vehicles over 6,000 lbs gross vehicle weight have special rules. See our Section 179 vehicle guide.

Don't buy equipment just for the deduction. A $50,000 purchase that saves $15,000 in tax still costs you $35,000.

2. Which retirement plans need action before year-end?

Retirement contributions are usually the largest deduction available to profitable owners, but the setup rules differ by plan.

• Solo 401(k): lets you contribute as both employee and employer. Setup rules are strict, so open it with your provider before year-end to be safe. See Solo 401(k) for the self-employed.
• SEP-IRA: can be established and funded up to your filing deadline, including extensions, which makes it the fallback if you miss December 31.
• Defined benefit plan: allows the largest contributions for high earners, but needs planning and actuarial setup. See defined benefit plans.

3. If I'm an S-Corp, what payroll moves matter?

Your reasonable salary must actually be paid through payroll during the year. If you've been taking distributions without a salary, fix it before December 31. A salary that never ran through payroll is one of the most common S-Corp audit issues.

• Run payroll for any remaining salary before year-end.
• Have the S-Corp pay your health insurance premiums so they're handled correctly on your W-2.
• Reimburse home office, mileage and phone expenses through an accountable plan before the books close.

Not sure your salary is defensible? See how to set a reasonable S-Corp salary.

4. Should I prepay expenses?

Cash-basis businesses can often deduct expenses paid by December 31, even if the benefit extends into next year, within limits. Generally, prepaid expenses whose benefit doesn't extend beyond 12 months (or the end of next year) can qualify. Common candidates: software subscriptions, insurance, and supplies you'll use early next year. Keep it to things you'd buy anyway.

5. Can I hire my kids before the year ends?

Wages paid to your children for real work can shift income into their lower tax bracket, but the wages must be paid during the year. The work has to be legitimate and the pay reasonable for the job. See our full guide on hiring your kids.

6. What about the Augusta Rule and family strategies?

If your business rents your home for legitimate meetings, IRC Section 280A(g) lets you exclude up to 14 days of rental income, but the meetings have to happen during the year. Document them with agendas, attendees and a market-rate rental amount. See the Augusta Rule guide.

7. Should I harvest investment losses or bunch charitable gifts?

Selling investments at a loss before year-end can offset capital gains, plus up to $3,000 of ordinary income. Watch the wash-sale rule if you rebuy within 30 days. If you give to charity, a donor-advised fund lets you bunch several years of giving into one deductible year.

8. When is the last estimated tax payment due?

The fourth-quarter 2026 estimated payment is generally due January 15, 2027. If your income spiked late in the year, the annualized income method may reduce underpayment penalties. See quarterly taxes with seasonal or uneven income.

9. Should I elect S-Corp status for 2027?

If your net profit is consistently above roughly $50,000 to $80,000, decide now. You can file Form 2553 at any time during 2026 for the election to take effect in 2027, or by March 15, 2027 at the latest for a calendar-year business. Model it with the S-Corp calculator.

Your Year-End Checklist

1. Place planned equipment purchases in service by December 31.
2. Open a Solo 401(k) if you want one; SEP-IRA can wait until your filing deadline.
3. Run any remaining S-Corp payroll and accountable plan reimbursements.
4. Prepay qualifying expenses you'd buy anyway.
5. Pay family wages for real work performed.
6. Harvest losses and plan charitable giving.
7. Calendar the January 15 estimated payment.
8. Decide on the S-Corp election for 2027.

This article is for educational purposes and isn't tax advice. Confirm each move with your CPA.