Quarterly Tax Planning Checklist for Business Owners

Key Takeaways

• Tax planning is year-round work, not a December scramble
• Q1 focuses on entity elections and prior year cleanup
• Q2 is for mid-year review and estimated payment adjustments
• Q3 begins year-end preparation with projections and decisions
• Q4 executes final moves before December 31st deadlines
• Download our quarterly planning template to stay on track

Most business owners only think about taxes twice a year: once in March when returns are due, and once in December when they realize time is running out. By then, most quarterly tax planning opportunities have passed.

The best tax planning happens throughout the year. Each quarter has specific tasks, deadlines, and opportunities. Miss them, and you’re leaving money on the table or scrambling to catch up.

At SDO CPA, we call it “October planning, not April scrambling.” But really, effective planning starts in January and continues every quarter. This guide breaks down exactly what to do each quarter to stay ahead of your taxes.

Why Quarterly Tax Planning Beats Annual Scrambling

Tax planning requires lead time. Many strategies have deadlines that fall throughout the year, not just December 31st.

The problem with annual planning:

• March planning: You’re just documenting what happened. The prior year is locked. You can’t change income timing, make entity elections, or add deductions.
• December planning: Better, but rushed. Some deadlines have already passed (retirement plan setup, for example). You’re making hasty decisions under pressure.

The quarterly advantage:

• Q1: Set the foundation. Make elections while you still can.
• Q2: Course correct. Adjust estimates based on actual results.
• Q3: Prepare. Identify year-end opportunities while there’s time.
• Q4: Execute. Implement strategies you planned in Q3.

Each quarter builds on the previous one. Skipping a quarter doesn’t just delay planning; it eliminates options.

For comprehensive planning strategies, see our main tax planning page.

Q1 Tax Planning (January – March): Setup and Elections

Q1 is foundation time. You’re closing out the prior year and setting up the current year for success.

January Priorities

Review prior year results: Before diving into the new year, analyze what happened last year. What strategies worked? What would you do differently? This informs current-year planning.

S-Corp election awareness: If you’re considering S-Corp election for the current year, the deadline is March 15th. Start gathering information now. See our guide on how to start an S-Corp.

Retirement plan review: Is your retirement plan still the right fit? Solo 401(k)s can’t be established retroactively. If you need a new plan, start the paperwork now.

Bookkeeping cleanup: Start the year with clean books. Reconcile accounts, categorize transactions, and establish good systems.

Q4 estimated tax payment: The Q4 estimated payment for the prior year is due January 15th. You can pay it in December if preferred (sometimes beneficial for state tax deduction timing).

February Priorities

Gather prior year documents: Collect 1099s, W-2s, K-1s, and other tax documents as they arrive. Track what’s expected vs. received.

Reconcile prior year: Close out prior year books. Ensure all transactions are properly categorized. Run final reports.

Entity structure evaluation: Is your current structure optimal? Now is the time to consider changes for next year (since current-year S-Corp election is still possible).

State compliance: Many states require annual reports or registrations. Check your state’s deadlines and requirements.

March Priorities

S-Corp election deadline (March 15): Form 2553 for current year S-Corp treatment is due March 15th. Late elections are possible in some cases but not guaranteed.

S-Corp and Partnership returns: Business returns (Form 1120-S and Form 1065) are due March 15th, or file an extension (Form 7004).

K-1 distribution: Partners and shareholders need K-1s to file their individual returns. Issue them promptly.

Q1 estimated payment preparation: Calculate your first estimated payment for the current year, due April 15th.

See our guide on S-Corp tax deadlines and filing requirements.

Q1 Checklist

•  Review prior year return for planning opportunities
•  Evaluate entity structure (S-Corp election decision)
•  Make S-Corp election if appropriate (March 15 deadline)
•  Set up or review retirement plan structure
•  File business returns or extensions (March 15)
•  Pay Q4 prior-year estimated tax (January 15)
•  Prepare Q1 estimated payment (April 15)

Q2 Tax Planning (April – June): Mid-Year Review

Q2 is assessment time. You have Q1 actual results and can compare to projections.

April Priorities

Tax filing: Individual returns (Form 1040) are due April 15th, or file an extension (Form 4868). Extensions extend filing time, not payment time.

Q1 estimated payment: First estimated tax payment for the current year is due April 15th.

Post-filing analysis: After filing returns, review them for planning opportunities. What could you have done differently? What should you plan for next year?

Document decisions: Record what worked and what didn’t from the prior year. These notes inform future planning.

See our federal income tax deadlines guide for complete deadline information.

May Priorities

Year-to-date financial review: How is Q1 comparing to your projection? Are revenues higher or lower than expected? Are expenses in line?

Cash flow planning: Based on actual results, do you need to adjust estimated payments? Higher income may require higher estimates to avoid penalties.

Retirement contribution tracking: Are you on track for your full-year retirement contribution goal? Adjust payroll or contribution schedule if needed.

State filing cleanup: Any state returns still outstanding? Some states have different deadlines.

June Priorities

Q2 estimated payment: Second estimated tax payment is due June 15th.

Mid-year income projection: Based on 5 months of actual data, project your full-year income. How does it compare to your January projection?

Adjust estimates if needed: If income is tracking significantly higher than expected, increase remaining estimated payments. If lower, you might reduce them (but maintain safe harbor).

Schedule Q3 planning: Book your summer planning conversation with your CPA. Calendars fill up in fall.

Q2 Checklist

•  File individual returns or extensions (April 15)
•  Pay Q1 estimated taxes (April 15)
•  Review filed returns for future planning notes
•  Compare actual Q1 results to projection
•  Pay Q2 estimated taxes (June 15)
•  Update full-year income projection
•  Schedule Q3/Q4 planning meeting

Q3 Tax Planning (July – September): Year-End Preparation Begins

Q3 is when serious year-end planning starts. You have half-year results and time to implement strategies.

July Priorities

Full-year projection: With 6 months of actual data, create a refined full-year projection. This drives all subsequent planning.

Identify planning opportunities: Based on projected income, what strategies apply?

• Equipment purchases (Section 179, bonus depreciation)
• Retirement contribution maximization
• Income timing (accelerate or defer?)

S-Corp salary review: If you’re an S-Corp owner, is your year-to-date salary on track for a reasonable full-year amount? Time to adjust if needed.

See our guide on S-Corp reasonable compensation.

State tax planning: Consider PTE (pass-through entity) elections for state tax planning. Deadlines vary by state.

August Priorities

Equipment purchase decisions: If you’re considering significant equipment purchases, now is the time to decide. You’ll need time for ordering, delivery, and installation before year-end.

Section 179 and bonus depreciation require assets to be “placed in service” by December 31st. That means delivered AND operational, not just ordered.

See our Section 179 deduction guide.

Retirement plan review: Can you contribute more than originally planned? If income is higher than expected, you may have room for additional retirement savings.

QBI planning: Are you above the QBI threshold? If so, wage and property limitations may affect your deduction. Analyze whether adjusting S-Corp salary or making equipment purchases helps.

Use our QBI calculator to model scenarios.

Document organization: Start gathering documents for year-end planning. Organized records make planning meetings more productive.

September Priorities

Q3 estimated payment: Third estimated tax payment is due September 15th.

Year-end planning meeting: Schedule your detailed planning meeting for October. This is the most important planning conversation of the year.

Extended returns: If you filed extensions for S-Corp or partnership returns, September 15th is the final deadline.

October 15 individual extension: Reminder: Individual returns on extension are due October 15th.

Q3 Checklist

•  Create refined full-year income projection (based on 6 months actual)
•  Identify equipment purchase opportunities
•  Review S-Corp salary vs. year-end target
•  Analyze QBI threshold and limitations
•  Pay Q3 estimated taxes (September 15)
•  File extended S-Corp/partnership returns (September 15)
•  Schedule October tax planning meeting

Q4 Tax Planning (October – December): Execute Year-End Moves

Q4 is execution time. The analysis is done. Now you implement.

October Priorities

Tax planning session: This is the most important meeting of the year. With 9 months of actual data and 3 months remaining, you can make informed decisions.

Topics to cover:

• Final income projection
• Specific strategies to implement
• Deadlines for each action
• Documentation needed

Entity decisions for next year: If you’re considering S-Corp election for next year, start the evaluation now. You’ll want time to prepare before the March 15th deadline.

Retirement plan setup: If you need a Solo 401(k), it must be established by December 31st. You don’t have to fund it by then, but the plan documents must exist. Start the paperwork now.

See our Solo 401(k) complete guide.

Link to: Year-end tax planning checklist

November Priorities

Equipment purchases: Time is running short. Equipment must be “in service” by December 31st. That means:

• Ordered
• Delivered
• Installed (if applicable)
• Operational

November is often the last realistic month for ordering significant equipment.

Charitable giving: Plan charitable contributions. Consider:

• Donor-advised fund contributions (get deduction now, distribute later)
• Appreciated stock donations (avoid capital gains)
• Bunching donations (combine multiple years to exceed standard deduction)

Capital gains/losses: Review investment portfolio. Harvest losses to offset gains. Watch the wash sale rule (30-day limitation on repurchasing substantially identical securities).

Q4 estimated payment planning: Calculate what you’ll owe for Q4. The payment isn’t due until January 15th, but paying by December 31st can help with state tax deductions.

December Priorities

Retirement contributions: Maximize contributions before year-end:

• Solo 401(k) employee contributions: December 31st deadline
• Employer contributions: Can wait until filing deadline
• SEP-IRA: Can wait until filing deadline

S-Corp final payroll: Run final payroll with optimal salary/distribution split. Include:

• Reasonable salary
• Health insurance premiums (if 2% shareholder)
• HSA contributions (if applicable)

Section 179 finalization: Last chance for equipment to be placed in service. Verify delivery and operational status.

Income timing: Last decisions on:

• Invoicing (delay if beneficial)
• Collections (defer or accelerate)
• Expense payments (prepay if beneficial)

Q4 estimated payment: Due January 15th, but you can pay by December 31st. This matters for:

• State tax deduction timing
• Cash flow management
• Avoiding January surprise

Q4 Checklist

•  Complete October tax planning meeting
•  Make entity decisions for next year
•  Set up retirement plans if needed (December 31 deadline)
•  Complete equipment purchases (in service by December 31)
•  Execute charitable giving strategy
•  Review and harvest capital gains/losses
•  Run final S-Corp payroll (salary, health insurance, benefits)
•  Maximize retirement contributions
•  Make final income and expense timing decisions
•  Plan Q4 estimated payment (January 15)

2026 Key Tax Deadlines Calendar

Keep these dates on your calendar:

For a complete list, see our business tax deadlines calendar.

Downloadable Quarterly Planning Template

Get the Quarterly Planning Template

Download our printable quarterly planning template with checkboxes, deadline reminders, and space for notes. Includes separate sheets for S-Corp, Partnership, and Sole Proprietor business types.

[Download Planning Template] (Email capture form)

Template Features:

• Quarterly checklists by business type
• Key deadline calendar (printable)
• Income projection worksheet
• Year-over-year comparison tracker
• Notes section for CPA conversations

How Often Should You Meet With Your CPA?

The right frequency depends on your situation.

Minimum (Simple Situation): Twice per year:

• Q3 planning meeting (September/October)
• Filing season (February/March)

Recommended (Most Business Owners): Quarterly check-ins (15-30 minutes each):

• Q1: Prior year review, current year setup
• Q2: Mid-year projection, estimate adjustments
• Q3: Year-end planning strategy
• Q4: Final execution confirmation

Ideal (Complex or Rapid Growth): Monthly check-ins for:

• Multiple entities
• Rapidly changing income
• Major transactions (acquisitions, exits)
• First year of significant change

SDO approach: We initiate outreach. You shouldn’t have to chase us for planning conversations. Proactive communication is how we catch opportunities before deadlines pass.

Frequently Asked Questions

Why is quarterly tax planning important?

Quarterly planning catches issues early and keeps options open. Many tax strategies require advance action. By December, options are limited. By April, you’re just documenting what happened. Quarterly rhythm ensures you never miss deadlines or planning opportunities.

What should I discuss in a quarterly tax meeting?

Focus on: income vs. projection, upcoming changes (new hires, equipment purchases, potential sale), tax law updates that affect you, estimated payment adequacy, and specific strategies to implement before the next deadline. Come prepared with updated financials.

When should I set up a retirement plan?

Solo 401(k) plans must be established by December 31st of the year you want to make employee contributions. SEP-IRAs can be established until your tax filing deadline (including extensions). For maximum flexibility, establish plans as early as possible.

How do I know if my estimated payments are on track?

Compare your year-to-date income to your full-year projection. If income is running significantly higher than expected, increase Q3/Q4 estimates to avoid underpayment penalties. Safe harbor rule: Pay at least 100% of prior year tax (110% if AGI exceeds $150,000) to avoid penalties regardless of current year liability.

What happens if I miss a quarterly tax deadline?

Consequences vary by deadline. Missing estimated payments may result in underpayment penalties (currently around 8% annually). Missing the March 15th S-Corp election means waiting until next year. Missing December 31st deadlines for retirement plan setup or Section 179 purchases means losing those deductions entirely.

Can I do quarterly planning myself?

For simple situations (sole proprietor, predictable income, few deductions), self-planning is possible. For S-Corps, partnerships, multiple entities, or income above $150,000, professional quarterly planning typically saves more than it costs. The complexity creates opportunities that require expertise to capture.

Get Quarterly Planning Support

Year-round planning relationships beat transactional filing arrangements. When your CPA knows your business, they spot opportunities you’d miss.

SDO’s Quarterly Planning Approach:

• Proactive outreach: We reach out to schedule check-ins. You don’t have to remember.
• Structured meetings: Focused agendas covering projections, strategies, and action items.
• Documentation: Written notes from each meeting so nothing falls through cracks.
• Deadline tracking: We monitor deadlines and remind you before they pass.

What Quarterly Planning Includes:

1. Q1 review: Prior year analysis, entity elections, retirement setup
2. Q2 check-in: Mid-year projection, estimate adjustments, course correction
3. Q3 strategy: Year-end planning, opportunity identification, action plan
4. Q4 execution: Final decisions, contribution deadlines, year-end close

Ready for year-round planning? Start quarterly planning with SDO CPA.