Three Tax Moves Small Business Owners Should Make Before December 31

Every spring, business owners ask me, “Is there anything we can do to lower this?” By then, the year is already over. The real savings happen before December 31. Here are three moves worth making now.
1. Put your kids on payroll.
If your children do real work for your business, you can pay them a reasonable wage and deduct it. In 2026, a child can earn up to $16,100 and owe no federal income tax. If you’re in the 24% bracket, paying your teen $16,100 saves you $3,864 in federal income tax. For sole proprietors and family owned LLCs, wages paid to a child under 18 also skip Social Security and Medicare, which saves roughly $2,275 more. Keep timesheets and pay them from your business account.
2. Fund your retirement.
Retirement contributions come straight off your taxable income. In the 24% bracket, putting away $20,000 saves you $4,800, and that money is still yours. Some plans, like a Solo 401(k), need to be set up before the year ends, so don’t wait until April to ask.
3. Time your equipment purchases.
If your business already needs a truck, computer, or equipment, putting it to use before December 31 can let you deduct the full cost this year. A $30,000 purchase could save you $7,200 in federal tax. Just never buy something only for the write off. Spending $30,000 to save $7,200 still costs you $22,800.
The deadline is the whole point.
These moves only work in October and November, before the year closes out. A short conversation now can save you thousands in April. Family Tax has served Santa Clarita and Antelope Valley families since 2009, with offices in Stevenson Ranch and Lancaster. Book your planning session before the year ends.
For more information give me a call at 661-339-3360.

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