By October, most of your year is already written. But the final quarter is still when Houston business owners have the most control over what they’ll owe in April.
After December 31, your options narrow sharply. Equipment can no longer be placed in service for this year, payroll retirement deferrals are closed, and income timing is fixed. A few smart moves now can keep $10,000 to $50,000 or more in your business instead of sending it to the IRS.
100% Bonus Depreciation Is Back and Permanent
Under the One Big Beautiful Bill Act, qualifying equipment acquired after January 19, 2025 is permanently eligible for 100% bonus depreciation. You can deduct the full cost in the year it’s placed in service, instead of spreading it over five to seven years.
Section 179 Expensing
For 2026, Section 179 lets businesses expense up to $2,560,000 of qualifying property, with a phase-out starting at $4,090,000. Unlike bonus depreciation, Section 179 can’t exceed your business income. However, it lets you choose asset by asset how much to expense, which is useful for fine-tuning your taxable income.
Real Example: A Cypress Contractor’s Excavator
A Cypress excavation contractor expects $400,000 in net profit. He buys a $180,000 excavator in November and puts it to work on a job site by mid-December.
Even if he finances the machine, he gets the full deduction this year. Just remember that buying equipment you don’t need only for the deduction is still spending money. IRS Publication 946 covers the full depreciation rules.
Don’t Forget the De Minimis Safe Harbor
Smaller items such as laptops, tools, and office furniture that cost up to $2,500 per invoice or item can generally be expensed immediately under the IRS tangible property de minimis safe harbor. You won’t need to track them as fixed assets.
Retirement contributions are among the cleanest year-end deductions available, but deadlines vary by plan:
Example: An S corp owner paying himself a $120,000 salary could contribute $24,500 as an employee and $30,000 as the employer, for a total of $54,500. At a 32% bracket, that’s roughly $17,400 in federal tax savings. The IRS breaks down each plan option on its retirement plans for self-employed people page.
If your business uses cash-basis accounting, when money moves determines which year it’s taxed.
Defer income (if you expect the same or lower rates next year):
Accelerate expenses:
Example: A Woodlands consulting firm defers $40,000 in December billings and prepays $15,000 in insurance and software. That shifts $55,000 of taxable income into next year and delays about $17,600 in federal tax.
When to reverse the strategy: If you expect next year’s income to rise sharply, for example because of a large new contract or the sale of a business, it may make sense to accelerate income into this year instead. This is where proactive tax planning pays for itself.
Accrual-basis businesses have different rules. Bonuses accrued by year-end can generally be deducted if they’re paid within 2½ months after year-end. Accurate, up-to-date books are essential, and our small business accounting team can help make sure your numbers are ready.
For more than 25 years, Riley & Company has helped Houston business owners finish the year strong:
It depends, Bonus depreciation has no cap and can create a loss. Section 179 gives you more control asset by asset but is limited by your business income. A CPA can model which approach saves more for you.
Not always, If you expect to be in a higher bracket next year, or you’re planning to sell or expand, recognizing income this year may lower your total tax bill over time.
October or early November is ideal. That leaves time to buy equipment, adjust payroll, and set up retirement plans before December deadlines pass.
Year-end tax planning happens in October, November, and December, not in April. Equipment timing, retirement contributions, and income and expense timing can add up to tens of thousands of dollars in savings.
Riley & Company CPA helps business owners in Houston, The Woodlands, Northwest Houston, and Cypress turn year-end planning into real savings. Contact Riley & Company today to schedule your year-end tax planning meeting while there’s still time to act.
You don’t need to predict the future. You just need to prepare for it.
With smart cash management, thoughtful tax strategy, and the right advisory partner, you can turn uncertainty into opportunity.
