Tax season can feel overwhelming for many businesses, especially if you’re managing multiple accounts, employees, and deadlines.
Even for businesses that plan to file for an extension, preparing early is key to reducing stress, avoiding mistakes, and taking advantage of every possible tax-saving opportunity.
Fortunately, with a few proactive steps, you can enter tax season organized, informed, and ready to make strategic decisions for your business.
1. Organize Your Financial Records
Before filing, or even requesting an extension, make sure your records are accurate and complete. Key items to review:
- Income statements, balance sheets, and cash flow statements: Reconcile totals with your accounting software.
- Bank and credit card statements: Check for missing transactions and flag unusual items.
- Payroll records: Ensure W-2s, 1099s, and payroll tax filings are correct.
- Invoices and receipts: Sort by category (office supplies, travel, meals, etc.) for deduction tracking.
- Assets, loans, and investments: Confirm depreciation schedules, loan balances, and interest paid.
Actionable Tip: Reconcile all accounts in QuickBooks, Xero, or your accounting software now. Doing this early prevents last-minute surprises and makes preparing Form 1120, 1065, or Schedule C much easier.
2. Stay Up-to-Date on Tax Law Changes
Several recent tax law changes and permanent provisions from 2025 could impact your deductions, credits, and reporting requirements:
- Bonus Depreciation & Section 179 Expensing: These are now permanent, potentially allowing a full deduction of qualifying equipment or property purchased in 2025.
- Example: Buying $50,000 in machinery could reduce taxable income by the same amount, subject to income limits and other rules.
- R&D Credits: The Research & Development (R&D) tax credit is now permanently available, providing a dollar-for-dollar reduction in federal tax liability for businesses that invest in innovation. Eligible expenses include employee wages, supplies and materials, and software development. (link to article on what businesses need to know about changes to the R&D tax credit)
- Corporate & Pass-Through Rates:
- C corporations: 21% flat federal rate
- Pass-through owners: Income from pass-through entities (such as S corporations, partnerships, LLCs, or sole proprietorships) is taxed at individual rates ranging from 10% to 37%. The 20% Qualified Business Income (QBI) deduction is now permanent under the One Big Beautiful Bill Act. Eligible owners can reduce their taxable business income by up to 20%, subject to income limits and other rules, providing stability and easier planning for 2026 and future years.
- Small Business Incentives: Some tax credits may be available for small businesses, including those related to employee benefits, hiring, or childcare support. Reviewing your business activities and expenses can help you identify opportunities to reduce your 2025 tax liability.
- Retirement Contributions: Maximize SEP-IRA, SIMPLE IRA, or 401(k) contributions for employees and owners as they reduce taxable income if made by the business deadline.
Actionable Tip: Schedule quarterly reviews of your income, expenses, and planned purchases. This helps you track deductions, credits, and retirement contributions throughout the year so you don’t miss any opportunities.
3. Strategically Manage Deadlines and Payments
Filing an extension or making estimated tax payments can reduce pressure and prevent penalties but it must be done correctly:
Filing an Extension:
- Use Form 7004 (corporations) or the equivalent for partnerships, LLCs, or sole proprietors to request additional time to file a tax return.
- Gives extra time to gather documents, check deductions, and avoid mistakes.
- Important: An extension does not extend the payment deadline.
- Extensions are due to the IRS by:
- March 15, 2026: S corporations and partnerships
- April 15, 2026: C corporations and sole proprietors
Estimated Tax Payments:
- Taxpayers that don’t have taxes automatically withheld (common for income from pass-through entities) must make quarterly tax payments
- Individual Taxpayers:
- Pay at least 90% of your 2025 tax liability or 100% of the total prior year tax (110% if prior year income > $150,000) by April 15, 2026 to avoid penalties.
- Schedule 2026 estimated tax payments:
- Q1: April 15, 2026
- Q2: June 15, 2026
- Q3: September 15, 2026
- Q4: January 15, 2027
- C corporation taxpayers:
- Pay at least 100% of your 2025 tax liability or 100% of the total prior year tax by April 15, 2026 to avoid penalties.
- Schedule 2026 estimated tax payments:
- Q1: April 15, 2026
- Q2: June 15, 2026
- Q3: September 15, 2026
- Q4: December 15, 2026
Actionable Tip: Estimate payments based on last year’s tax liability and adjust for changes in revenue. Set calendar reminders or automate payments through your bank or payroll provider to stay on track.
Preparing Now Pays Off Later
Tax season doesn’t have to be a scramble. By organizing your records, staying up-to-date on tax law changes (including key OBBBA provisions), considering extensions, reviewing deductions, and planning estimated payments, your business can enter 2026 tax season with confidence.
Every business’s situation is unique and tax laws can be nuanced and complex. Consulting a qualified tax advisor can help ensure you maximize deductions, stay compliant, and make the best strategic decisions for 2026.