Tax Planning Services for Small Business
Year-round planning that pays for itself. Not April scrambling. We help S-Corps, partnerships, and LLCs pay less through proactive strategy.
Key Takeaways
- Tax planning happens in October, not April. Year-end scrambles leave money on the table.
- The OBBBA made QBI permanent with expanded income ranges and a new $400 minimum deduction for 2026.
- SDO clients average $47,000/year in identified savings through proactive, year-round tax planning.
- S-Corps and partnerships have 3x more planning opportunities than sole proprietorships.
- Good planning starts with accurate compliance. We do both.
Tax planning is the year-round analysis of your financial situation to minimize taxes through legal strategies. It’s different from tax preparation (filing returns) and tax evasion (illegal). Tax planning happens throughout the year, with key decisions made in October, not April. Effective planning includes retirement contributions, entity elections, income timing, depreciation strategies, and QBI optimization. If your CPA only calls you in March, you’re only getting preparation, not planning.
Tax Planning vs. Tax Preparation: Know the Difference
Most CPAs focus on tax preparation. Filing your return correctly. Looking backward. That’s table stakes. Strategic tax planning looks forward, modeling scenarios and implementing strategies that reduce what you owe next year.
Tax Planning (Looking Forward)
- Happens year-round, especially October
- Models scenarios before year-end
- Implements strategies proactively
- Optimizes entity structure
- Times income and deductions
- Maximizes retirement contributions
- Reduces future tax liability
Tax Preparation (Looking Backward)
- Happens during tax season
- Records what already happened
- Files returns accurately
- Reports income and deductions
- Calculates tax owed
- Meets filing deadlines
- Documents compliance
Why Both Matter
Planning without good preparation is building on sand. We analyze your completed returns to find opportunities for next year. Every optimization strategy we recommend is grounded in accurate data from your prior returns. That’s why we do both. Learn about our tax preparation services.
If your CPA only contacts you in March, asking for documents, and sends you a PDF in April, you’re only getting preparation. Strategic planning requires year-round engagement and proactive decision-making before year-end.
2026 Tax Law Changes: What the OBBBA Means for Your Business
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, made sweeping changes affecting tax planning for 2026 and beyond. Here’s what matters for small business owners:
| Provision | Before OBBBA | 2026 (OBBBA) |
|---|---|---|
| QBI Deduction | Expiring Dec. 31, 2025 | Permanent |
| QBI Phase-In Range (MFJ) | $100,000 | $150,000 (50% increase) |
| QBI Minimum Deduction | None | $400 (if $1K+ QBI) |
| Section 179 Limit | $1.25 million | $2.56 million |
| Bonus Depreciation | Phasing down to 40% | 100% restored |
| SALT Cap | $10,000 | $40,000 |
| R&D Expenses (Domestic) | 60-month amortization | Immediate deduction |
| 401(k) Limit | $23,500 | $24,500 |
These changes create new planning opportunities. The permanent QBI deduction provides long-term stability for entity structure decisions. The expanded phase-in ranges mean more taxpayers qualify for the full 20% deduction. And 100% bonus depreciation makes equipment timing strategies valuable again.
For detailed QBI planning strategies, see our QBI deduction planning guide.
When Does Tax Planning Happen? The Year-Round Calendar
Effective tax planning isn’t a December scramble. It’s a year-round process with specific activities each quarter. Here’s what happens when:
Q1: Foundation Quarter
Set the year’s strategy and handle time-sensitive elections.
- S-Corp election deadline (Form 2553): March 15
- Retirement plan setup (SEP-IRA, Solo 401k)
- Prior year return analysis for opportunities
- Estimated payment strategy for the year
- Entity structure review
Q2: Mid-Year Review
Compare actuals to projections and adjust course.
- Q1 actual vs. projected income analysis
- Estimated payment adjustment if needed
- Income timing review and planning
- Retirement contribution tracking
- Mid-year financial checkup
Q3: Projection Quarter
Model year-end scenarios and prepare for Q4 decisions.
- Year-end projection modeling
- Equipment purchase decisions (Section 179)
- Income acceleration or deferral strategy
- September 15: Extension deadline
- Q4 planning preparation
Q4: Implementation Quarter
Execute planned strategies before year-end deadlines.
- Final planning moves implementation
- Year-end transactions and timing
- Retirement contribution maximization
- Section 179 and equipment purchases
- December 31 deadline execution
October Is the Most Important Tax Month
Not April. Not December. October. It’s your last chance to make meaningful changes while still having time to implement them. Year-end is too late for many strategies. S-Corp salary adjustments, equipment purchases, income timing decisions, retirement contributions, and entity elections all require lead time. October planning, not April scrambling.
For a detailed checklist, see our quarterly tax planning checklist or year-end tax planning checklist.
Tax Planning Strategies That Actually Work
These aren’t theoretical ideas. These are strategies we implement with clients every year, with documented savings.
Retirement Plan Optimization
SEP-IRA (25% of compensation), Solo 401(k) ($24,500 + 25%), defined benefit plans ($275,000+). Immediate deductions while building wealth.
Potential: $10,000-$100,000+S-Corp Salary Optimization
Balance reasonable compensation requirements with payroll tax efficiency. The sweet spot saves self-employment tax without triggering IRS scrutiny.
Potential: $5,000-$20,000QBI Deduction Maximization
The 20% pass-through deduction requires strategic planning. Spouse income, W-2 wages, and SSTB status all affect your deduction.
Potential: $8,000-$25,000Section 179 & Bonus Depreciation
$2.56M Section 179 limit and 100% bonus depreciation create significant equipment timing opportunities. Time purchases strategically.
Potential: $5,000-$50,000+Income & Expense Timing
Cash-basis businesses have flexibility. Accelerate deductions into high-income years. Defer income when rates are lower next year.
Potential: $3,000-$15,000PTE Election Strategy
Pass-through entity elections convert capped SALT into deductible business expenses. Critical for high-tax state owners.
Potential: $5,000-$20,000For the complete list of strategies with implementation details, see our tax planning strategies guide.
QBI Deduction Planning: Maximizing Your 20%
The Qualified Business Income deduction under Section 199A allows eligible pass-through business owners to deduct up to 20% of their qualified business income. The OBBBA made this permanent and expanded eligibility.
2026 QBI Thresholds
- Full deduction below: $203,000 (single) / $406,000 (married filing jointly)
- Phase-out complete at: $272,300 (single) / $544,600 (married filing jointly)
- New minimum deduction: $400 if you have at least $1,000 of QBI
What Affects Your QBI Deduction
- Spouse income: Combined taxable income determines phase-out status
- W-2 wages: Above thresholds, deduction limited to 50% of W-2 wages OR 25% of wages plus 2.5% of qualified property
- SSTB status: Specified service trades (law, health, consulting) face complete phase-out above thresholds
- Entity aggregation: Combining eligible businesses can optimize wage limitations
Real Example: The $23,000 Question
We analyzed a partnership return where the prior CPA missed $23,000 in QBI deductions. The issue? They didn’t collect spouse income data for the partners. The calculation required knowing that two partners’ spouses had W-2 income that changed their phase-out status. This is the kind of detail that requires deep pass-through experience.
Use our QBI calculator to estimate your deduction, or see our QBI planning strategies guide for optimization tactics.
Tax Planning by Entity Type
S-Corporation Tax Planning
S-Corps offer unique planning opportunities through salary vs. distribution optimization.
- Reasonable salary determination and documentation
- QBI interaction with W-2 wage decisions
- Retirement plan strategies (Solo 401k, SEP, defined benefit)
- Health insurance deduction (2% shareholder rules)
- Distribution timing for tax efficiency
- Shareholder basis planning
Partnership Tax Planning
Partnerships have the most flexibility but also the most complexity.
- Guaranteed payments vs. distributions tax impact
- Special allocation strategies per operating agreement
- Basis planning for distributions and sales
- PTE election analysis and optimization
- Section 199A optimization across partners
- Multi-partner coordination strategies
LLC Tax Planning
LLC taxation depends on election. Planning varies by structure.
- Default taxation vs. S-Corp election analysis
- Self-employment tax optimization
- Single-member vs. multi-member strategies
- Entity conversion timing
- State-specific LLC considerations
Multi-Entity Planning
Multiple companies need coordinated strategy, not separate CPAs.
- Holding company + operating company structures
- Intercompany transactions and allocations
- Consolidated planning across entities
- Real estate + operating business coordination
- Group health plans and retirement strategies
Is Tax Planning Worth It?
The planning fee is rarely your largest cost. Your tax bill is. Here’s when planning delivers the highest ROI:
Tax Planning Typically Pays for Itself When:
- You have an S-Corp or partnership (not sole proprietorship)
- Taxable income exceeds $150,000 (complexity increases savings)
- You operate multiple entities (coordination opportunities)
- You have real estate investments (depreciation strategies)
- You’re in a high-tax state (PTE election potential)
- Your income varies year to year (timing opportunities)
- You’re approaching retirement (contribution maximization)
Cost-Benefit Analysis
Standalone planning engagements typically range $1,500-$5,000 depending on complexity. But the average SDO client saves $47,000 in year one through optimization strategies. That’s a 10x-30x return on the planning investment.
At SDO CPA, tax planning is integrated with our ongoing client relationships. We don’t just file your return. We analyze it for next year’s opportunities. Planning isn’t an add-on. It’s how we work.
The Real Cost of “Just Filing”
A client came to us after 5 years with a preparer who “just filed.” We identified $73,000 in missed opportunities through amended returns and prospective planning. The prior fees were lower. The tax bills were much higher. The preparation fee isn’t your cost. Your tax bill is.
Frequently Asked Questions
What is tax planning?
Tax planning is the year-round analysis of your financial situation to minimize taxes through legal strategies. It’s different from tax preparation (filing returns) and tax evasion (illegal). Tax planning happens throughout the year, with key decisions made in October, not April. Effective planning includes retirement contributions, entity elections, income timing, and deduction acceleration.
What’s the difference between tax planning and tax preparation?
Tax preparation is recording what happened and filing returns. Looking backward. Tax planning is modeling scenarios and making decisions to reduce future taxes. Looking forward. Most CPAs only do preparation. If your CPA only calls you in March, you’re only getting preparation, not planning.
When should I start tax planning?
Start tax planning in January, not December. The best planning moves require time: S-Corp elections (due March 15), retirement plan setup, estimated payments, income timing. Year-end scrambles leave money on the table. October is the most important tax month. It’s your last chance to make meaningful changes while still having time to implement them.
What is the QBI deduction?
The QBI (Qualified Business Income) deduction under Section 199A allows eligible pass-through business owners to deduct up to 20% of their qualified business income. The OBBBA made this permanent starting in 2026, with expanded phase-in ranges. A new $400 minimum deduction applies if you have at least $1,000 of QBI. Use our QBI calculator to estimate your deduction.
How much can tax planning save?
Effective tax planning can save S-Corps and partnerships $15,000-$50,000+ annually through reasonable salary optimization, retirement contributions, QBI maximization, and depreciation strategies. SDO CPA clients average $47,000/year in identified savings through proactive planning. Savings depend on income level, entity structure, and complexity.
What changed with the OBBBA for tax planning?
The One Big Beautiful Bill Act made several provisions permanent: QBI deduction (was expiring), expanded phase-in ranges by $50,000-$100,000, new $400 minimum QBI deduction, Section 179 increased to $2.56 million, 100% bonus depreciation restored, SALT cap raised to $40,000, and domestic R&D expenses are immediately deductible.
What is reasonable salary for S-Corp owners?
Reasonable salary is what an S-Corp must pay shareholder-employees for services, subject to payroll taxes. The IRS requires it be comparable to what similar businesses pay for similar work. The optimal balance considers IRS factors, QBI wage limitations, Social Security wage base ($176,100 for 2026), and overall tax efficiency. See our reasonable salary guide.
What retirement plans work for small business tax planning?
SEP-IRA allows 25% of compensation up to $70,000 for 2026. Solo 401(k) allows $24,500 employee deferral plus 25% employer contribution. Defined Benefit plans can shelter $275,000+ annually. SIMPLE IRA allows $17,000 with required employer match. Each has different administration requirements. See our Solo 401(k) guide or SEP-IRA guide.
What is a PTE election?
A PTE (Pass-Through Entity) election allows S-Corps and partnerships to pay state income tax at the entity level instead of the owner level. This converts individual SALT that’s subject to the $40,000 cap into a fully deductible business expense. Most states now offer PTE elections. The election must be made annually with specific deadlines by state.
How much does tax planning cost?
Standalone planning reviews typically range $1,500-$5,000. At SDO CPA, tax planning is integrated with our preparation services. We don’t just file your return. We identify opportunities for next year. The planning fee typically pays for itself 5-10x through tax savings identified.
Tax Planning Articles
15+ strategies for small business owners with OBBBA updates
October-December action items and deadlines
Salary optimization, retirement, and QBI planning
Allocations, distributions, and PTE elections
Maximize your 20% pass-through deduction
IRS requirements and optimization strategies
Q1-Q4 planning activities and deadlines
Tax Planning Guides & Calculators
Complete guide to S-Corp taxation and elections
Partnership tax rules, basis, and distributions
Section 199A rules and eligibility
Estimate your Section 199A deduction
Compare S-Corp vs. sole proprietorship savings
Equipment expensing rules and limits
Setup, contributions, and optimization
Simplified employee pension planning
IRS factors and documentation requirements
Complete 2026 filing calendar
2% shareholder deduction rules
Business tax filing and compliance
Related Services
Ready for Proactive Tax Planning?
Stop leaving money on the table. Get year-round planning from CPAs who specialize in S-Corps and partnerships. Upload your last return. We’ll analyze what opportunities you’ve been missing.
Schedule a Tax Planning ReviewSDO CPA LLC is a licensed CPA firm in the state of Texas, regulated by the Texas State Board of Public Accountancy (22 TAC §501.82). Services described are subject to engagement terms. Results vary based on individual circumstances. Average client savings based on documented tax optimization strategies implemented during first engagement year. Tax planning strategies must comply with current IRS regulations and guidance. This communication does not constitute tax advice for any specific situation. Member of the American Institute of Certified Public Accountants (AICPA).