Most business owners start thinking about year-end tax planning in December. By then, most of the moves that would have actually made a difference are already off the table.

That is not a discipline problem. The fourth quarter is when you are closing out projects, covering holiday schedules, and trying to finish the year strong. Taxes feel like a spring problem, and the calendar makes it easy to believe there is still time.

Here is what makes this year worth a closer look. Colorado changed three business tax rules that take effect for the 2026 tax year, and several federal rules changed too. A checklist that worked last December will point you in the wrong direction this December.

Almost every lever that lowers a 2026 tax bill has to be pulled by December 31. Once the calendar turns, the year is closed, and your accountant is reporting history instead of shaping it.

Late September through November is the window. You have three quarters of real numbers to work from and a full quarter left to act on what they tell you.

Two dates matter. December 31 is when most decisions close. January 15, 2027 is when your fourth quarter estimated payment is due.

After the federal One Big Beautiful Bill Act reduced state revenue, Colorado held a special legislative session in August 2025 and the governor signed five tax bills. Three of them affect small businesses beginning with the 2026 tax year.

If your income sits below the QBI thresholds, and most owners in the $100,000 to $2 million range do, the deduction still flows through to your Colorado return in full. This one matters most for higher earning owners and for anyone whose income is climbing toward those lines.

Pro Tip: If your S corporation or partnership makes a Colorado SALT Parity election, the QBI add-back applies to your entire federal QBI deduction on your individual Colorado return, regardless of your income. The $500,000 and $1 million thresholds do not apply in that situation. Worth confirming before you make the election, not after.

Equipment and property rules are more generous than they have been in years. For 2026 you can expense up to $2,560,000 of qualifying property under Section 179, with the phase-out beginning at $4,090,000. One hundred percent bonus depreciation is also back permanently for qualifying property acquired and placed in service after January 19, 2025.

The phrase that trips people up is placed in service. Equipment you order in December but do not have installed and ready to use until January belongs on next year’s return. If a purchase is part of your plan, start it early enough that it is actually running before the year ends.

Retirement contributions are the other large lever. For 2026 the 401(k) salary deferral limit is $24,500, with an additional $8,000 catch-up at age 50 and $11,250 for ages 60 through 63. SEP IRA contributions are capped at the lesser of 25 percent of compensation or $72,000. SIMPLE IRA deferrals are $17,000, or $18,100 for employers with 25 or fewer employees.

Funding deadlines vary by plan type, but salary deferral elections generally need to be in place before the year ends. If you do not have a plan yet, opening one is a fourth quarter conversation, not an April one.

One easy thing to get wrong this year: the standard mileage rate changed mid-year. Business miles driven from January 1 through June 30, 2026 are deducted at 72.5 cents. Miles from July 1 through December 31 are deducted at 76 cents. Mid-year changes are rare, and most mileage logs are not set up to split the year. Fix yours before you hand anything over.

For payments made in 2026, the reporting threshold for Forms 1099-NEC and 1099-MISC rose from $600 to $2,000. That number had not moved since 1954. Fewer forms is good news, but a few things did not change:

• You still need a signed W-9 on file before you pay a contractor.
• Backup withholding rules still apply.
• The contractor still owes tax on the income whether or not a form is issued.
• Forms covering 2026 payments are due to recipients and the IRS by February 1, 2027, since January 31 falls on a Sunday.

• Reconcile your books through September so any projection is built on real numbers instead of estimates
• Compare year to date net profit against last year and against what your estimated payments assumed
• Decide on equipment purchases early enough to have them installed and running by December 31
• Confirm retirement plan elections, or start the conversation about opening a plan
• Split your mileage log at June 30 so both rates are applied correctly
• Update contractor records and confirm every W-9 is on file
• Review your entity structure, since an S corporation election for 2027 carries an early deadline
• Set aside the fourth quarter estimated payment due January 15, 2027

If your books are not current, that is the first item on the list rather than the last. Catching up comes before planning, because everything else here depends on numbers you can trust.

Now through November. In December the options narrow quickly, and by January most of them are gone.

Our tax services team builds year-end projections so you know what the bill looks like while you can still influence it. Our financial planning team helps you decide which moves actually fit the business, rather than just lowering a number on a form.

Year-end tax planning is not about finding a last minute deduction in December. It is about knowing where you are going to land while there is still time to change it.

That matters more than usual this year, because three Colorado rules and several federal ones changed at once. The owners who look at their numbers in October will have choices. The ones who wait until March will just have a return.

Ready to stop guessing and start planning? Schedule a free consultation with Lakeside Accounting Solutions.

When is the deadline for year-end tax moves? Most decisions affecting your 2026 return have to be made by December 31. A few items, including certain retirement plan contributions, can be funded later, but the elections generally need to be in place before the year closes. The fourth quarter estimated payment is due January 15, 2027.

Does the Colorado QBI add-back apply to me? Only if your adjusted gross income is $500,000 or more filing single, or $1 million or more filing jointly. Below those thresholds you keep the full federal deduction on your Colorado return. The exception is a SALT Parity election, which triggers the add-back regardless of income.

Can I buy equipment in December and still deduct it this year? Only if it is placed in service by December 31, meaning installed and ready for its intended use. Ordering it, paying for it, or having it sit in a box does not count. Build in lead time.

I have not been tracking mileage carefully. Is it too late? No, but reconstruct it now while the year is still fresh. You will need to separate miles driven before July 1 from miles after, because the rate changed mid-year. Waiting until March makes an already tedious job harder and less accurate.

This content is for informational purposes only and does not constitute legal, tax, or financial advice. Consult a qualified accounting professional for guidance specific to your situation.