September Tax Planning: 7 Things Small Business Owners Should Do Before Year-End
If you own a small business, September is one of the best times of the year to start thinking seriously about your taxes.
Not because tax season is right around the corner—it isn't.
That's exactly why now is the right time.
By September, you have several months of actual financial information available, but you still have enough time left in the year to make decisions that could affect your tax bill. Waiting until March or April to start thinking about taxes often means you're simply looking backward at decisions that have already been made.
Good tax planning works differently.
Instead of asking, "How much do I owe?" after the year is over, proactive tax planning asks, "What can I do between now and December 31 to put myself in a better position?"
For small business owners, September is also an important month because the third estimated tax payment for 2026 is generally due September 15. The IRS lists the 2026 estimated tax payment dates as April 15, June 15, September 15, and January 15, 2027 for calendar-year individual taxpayers.
Here are seven things you should be doing now.
1. Review Your Year-to-Date Profit
The first step in tax planning isn't buying something you don't need just to get a deduction.
It's understanding how your business is actually performing.
Pull your year-to-date profit and loss statement and look at:
Total revenue
Cost of goods sold
Gross profit
Operating expenses
Net profit
Owner draws or distributions
Major changes compared with last year
If your business is significantly more profitable than you expected, your tax liability may also be higher than expected.
If your business is less profitable, you may be overpaying estimated taxes.
Either way, you need accurate numbers before you make tax decisions.
This is one reason clean bookkeeping matters so much. If your books are months behind or transactions haven't been properly categorized, your CPA may be trying to make tax-planning decisions using incomplete information.
A September tax-planning meeting should start with a realistic picture of where your business stands today.
Don't confuse revenue with profit
A business doing $300,000 in revenue isn't necessarily more profitable than a business doing $150,000.
Your tax situation is driven by taxable income—not simply how much money came through your bank account.
That's why business owners should be watching their profit throughout the year rather than waiting until tax season to see the final number.
2. Review Your Estimated Tax Payments
If you're self-employed, operate a pass-through business, or otherwise have income that isn't sufficiently covered by withholding, estimated tax payments may be part of your tax strategy.
September 15, 2026 is an important estimated tax deadline for calendar-year taxpayers.
But don't blindly send the same payment you made last quarter.
Your business may look completely different today.
Maybe revenue increased significantly.
Maybe you hired employees.
Maybe you bought equipment.
Maybe you had an unusually large expense.
Maybe your business slowed down.
Maybe you started another source of income.
All of these things can change your tax picture.
The IRS provides methods for calculating estimated tax and avoiding underpayment penalties, and the required payment can vary based on your income and circumstances.
The goal isn't simply to send money to the IRS four times a year.
The goal is to make sure your payments are reasonable based on your actual tax situation.
If you haven't reviewed your estimated tax payments recently, September is a good time to do it.
3. Identify Potential Year-End Tax Deductions
This is where many business owners make a mistake.
They hear, "You need more deductions," and immediately start looking for something to buy.
That's backwards.
A tax deduction isn't free money.
If you spend $10,000 solely because you want a deduction, you still spent $10,000.
The better approach is to identify legitimate business expenses you already need or were already planning to incur and determine whether the timing of those expenses makes sense.
Depending on your business and circumstances, this could include:
Equipment
Computers and technology
Business software
Professional services
Advertising and marketing
Business insurance
Office expenses
Continuing education
Vehicle expenses
Retirement plan contributions
Other ordinary and necessary business expenses
The IRS provides specific rules for which business expenses are deductible and how certain assets and expenses must be treated. For example, the 2026 IRS Small Business Tax Guide includes rules covering business expenses, depreciation, vehicle expenses, retirement plans, and other deductions.
The important distinction is this:
Don't spend money just to save taxes.
Instead, look at expenses you're likely to incur anyway and determine whether there is a tax advantage to handling them before year-end.
4. Review Major Purchases Before December 31
If your business needs equipment or other significant assets, don't automatically wait until December to make the purchase.
Start the conversation now.
Depending on the asset, how it is used, when it is placed in service, and the applicable tax rules, purchasing and placing equipment in service before year-end may affect your current-year tax deduction.
But there is another side to this decision.
You need to ask:
Does the business actually need the asset?
A $20,000 piece of equipment isn't a good purchase simply because it could create a tax deduction.
If you were already planning to buy it because it will help your business generate revenue, improve efficiency, or replace outdated equipment, then tax planning becomes part of the purchasing decision.
This is where proactive tax planning can add real value.
Instead of making a purchase in December and asking your CPA about it afterward, talk to your CPA before making the purchase.
5. Review Your Business Structure
September is also a good time to ask whether your current business structure still makes sense.
This doesn't mean every LLC should become an S corporation.
It doesn't.
Your business structure should be based on your specific circumstances, including profitability, owner compensation, payroll requirements, administrative costs, tax considerations, and long-term plans.
If your business has changed substantially since you started it, however, it's worth reviewing.
For example, you might want to discuss your structure with your CPA if:
Your business has become consistently profitable
Your revenue has increased substantially
You're paying yourself differently than when you started
You're hiring employees
You're bringing in a business partner
You're opening another location
You're considering adding another owner
Your business activities have changed
You're considering an S corporation election
The IRS notes that an S corporation election generally has a specific filing deadline, although certain late-election relief provisions may apply depending on the circumstances.
The bigger point is that business structure is a planning decision, not simply a tax-return checkbox.
If your business has changed, your structure deserves another look.
6. Review Retirement Planning Opportunities
Business owners often focus so heavily on reducing this year's tax bill that they forget about one of the most valuable long-term planning tools available to them: retirement savings.
Depending on your business structure and circumstances, you may have several options, including:
SEP IRAs
SIMPLE IRAs
Solo or individual 401(k) arrangements
Traditional IRAs
Other qualified retirement plans
The IRS specifically identifies SEP, SIMPLE, and qualified retirement plans as tax-advantaged options available to small businesses.
Contribution limits and eligibility rules vary by plan.
For 2026, for example, the basic employee elective deferral limit for many 401(k) plans is $24,500, while the annual additions limit for defined contribution plans can be substantially higher depending on the circumstances.
For self-employed individuals, calculating retirement plan contributions can also be more complicated than simply multiplying business profit by a percentage. The IRS has specific rules for determining self-employed plan compensation.
That's why retirement planning should be part of the tax conversation before the end of the year.
You're not just asking:
"How can I reduce my taxes?"
You're asking:
"How can I reduce my taxes while putting more money toward my future?"
Those are very different questions.
7. Schedule Your Year-End Tax Planning Meeting Now
This is the most important step.
Don't wait until tax season.
By the time your tax return is being prepared, most of the major decisions affecting your 2026 tax bill have already happened.
Your CPA can report what happened.
Your CPA may be able to help you plan what happens next.
That's a major difference.
A good year-end tax planning meeting should look at your current financials, estimate your projected taxable income, review estimated tax payments, identify potential tax strategies, discuss major purchases, evaluate retirement opportunities, and identify anything that needs to happen before December 31.
You should walk away knowing:
Approximately where your tax liability is headed
Whether your estimated payments need to change
What deductions or strategies may be available
What purchases or investments should be considered
Whether your business structure should be reviewed
What records you need to maintain
What actions need to happen before year-end
And most importantly, you should have a plan.
Don't Wait Until Tax Season to Start Tax Planning
One of the biggest misconceptions about working with a CPA is that the relationship starts when tax season starts.
It shouldn't.
Tax preparation is largely about documenting and reporting what happened.
Tax planning is about using the information you have today to make better decisions before the year ends.
If you're a small business owner in Iowa and you haven't looked at your 2026 tax situation yet, September is a great time to start.
You still have time to make decisions.
You still have time to correct problems.
You still have time to adjust estimated payments.
And you still have time to take advantage of legitimate tax planning opportunities that may be available to you.
But that window gets smaller every day.
Ready to Get Ahead of Your Taxes?
At Knobbe & Associates, CPA, we work with small business owners who want more than someone who simply prepares their tax return.
Our goal is to help you understand your numbers, plan ahead, and make better financial decisions throughout the year.
If you want to know where your business is headed before tax season arrives, schedule a Small Business Tax Planning & Strategy consultation with Knobbe & Associates, CPA.
Don't wait until March to find out what you could have done in September.
