For an established business owner, September is a useful time to look at the year as it actually unfolded, not simply as it was projected in January.
By this point, you may have a much clearer picture of revenue, expenses, payroll, major purchases, staffing changes, and other developments that could affect your tax position. That makes the period before Q4 a practical time to review whether your current tax strategy still reflects the business you are operating today.
Tax planning is different from tax-return preparation. Preparing a return generally reports transactions that have already occurred. Planning gives business owners an opportunity to review their position while there may still be time to make informed business and tax decisions before year-end.
The Law Offices of Beverly Winstead provides tax planning, business law, tax-problem resolution, and estate-planning services, areas that can increasingly overlap as a business grows and ownership becomes more complex.
Start With Accurate Financial Records
Before making tax decisions, start with the numbers.
Review year-to-date revenue, business expenses, payroll, owner payments, major purchases, and other significant transactions. If bookkeeping or supporting documentation has fallen behind, addressing that before year-end can make the tax-planning process much more useful.
The IRS requires taxpayers to maintain records that support the income, expenses, credits, and other items reported on their returns. For business assets, records may also need to establish acquisition cost, improvements, depreciation, business use, and the eventual sale or disposition of the asset.
Good records do more than make tax filing easier. They allow an owner and their advisers to work from the actual financial position of the business rather than assumptions made earlier in the year.
Revisit Estimated Tax Payments
September 15, 2026 is an important federal estimated-tax date.
Individuals who are required to make estimated tax payments generally have their third 2026 installment due September 15. This can include business owners whose income is not fully covered by withholding. Calendar-year corporations that are required to make federal estimated-tax payments also generally have a third installment due September 15.
If business income has changed significantly during the year, it may be worth revisiting the calculation rather than assuming that an earlier projection still reflects the current tax picture.
Maryland taxpayers may also have state estimated-tax obligations depending on their circumstances. Maryland lists September 15 as one of the regular estimated-payment dates for individuals, and Maryland corporations that meet the state’s estimated-tax requirements generally make a third estimated payment in the ninth month of the tax year.
Maryland business owners operating through pass-through entities should be particularly careful in 2026. The Comptroller issued specific guidance explaining that legislative changes affect the calculation of 2026 estimated payments for certain pass-through entities, including entities electing to pay Maryland tax at the entity level. Businesses affected by those rules should use current Maryland guidance rather than automatically relying on prior-year calculations.
Review Owner Compensation and Worker Classification
Growth often changes the way a business pays both its owners and its workforce.
For S corporations, owner compensation deserves particular attention. The IRS states that an S corporation must pay reasonable compensation to a shareholder-employee for services performed before treating amounts as non-wage distributions to that shareholder-employee. What qualifies as reasonable compensation depends on the facts, including duties, experience, time devoted to the business, and what comparable businesses pay for similar work.
Worker classification should also be reviewed when roles or working relationships have changed.
A contract calling someone an “independent contractor” does not by itself determine federal employment-tax status. The IRS considers the actual relationship, including behavioral control, financial control, and the type of relationship between the business and worker.
For a growing business, getting these issues right matters because classification can affect payroll taxes, withholding, reporting obligations, and other employer responsibilities.
Review Major Purchases Before Year-End
Business owners often hear that they should make purchases before December because something is “tax deductible.”
That is not a sufficient reason to spend money.
The tax treatment of equipment, property, technology, and other business assets depends on the type of asset, how it is used, when it is placed in service, and the taxpayer’s particular circumstances. Different rules can apply to deductions and depreciation.
Before making a significant purchase primarily for tax reasons, consider whether the expenditure makes business sense first and then determine how the applicable tax rules affect the decision.
Accurate asset records are especially important because the IRS expects businesses to retain information needed to determine depreciation and any gain or loss when an asset is later disposed of.
Has the Business Outgrown Its Current Structure?
Tax planning can also reveal a larger question:
Does the company’s current legal and tax structure still make sense?
An LLC is a state-law entity, but its federal income-tax classification can differ depending on the number of owners and elections made. An LLC may be treated for federal income-tax purposes as a disregarded entity, partnership, or corporation.
That does not mean an established business should change its structure simply to pursue a particular tax result.
Changing entity classification or ownership can carry legal and tax consequences of its own. Structure should therefore be reviewed in the context of the owner’s broader goals, operations, liability concerns, compensation, ownership arrangements, and succession plans.
Beverly’s firm specifically provides assistance with business setup, business tax planning, and business contracts in addition to its tax-planning practice.
Do Not Wait Until Late December to Discuss Retirement Planning
If establishing a retirement plan is part of the company’s year-end strategy, timing can matter.
Different types of retirement plans operate under different rules and deadlines. For example, an employer that did not previously maintain a SIMPLE IRA generally may establish one effective between January 1 and October 1. Special rules apply in certain situations, including newly created employers.
Because plan requirements vary, owners considering a new retirement arrangement should discuss the available options with the appropriate tax and retirement-plan professionals rather than assuming every plan can be created at year-end.
Year-End Planning Is About More Than Finding Another Deduction
For an established owner, tax planning should not be reduced to a December search for deductions.
A more useful pre-Q4 review asks whether:
your financial records are current, estimated payments still reflect current income, owner compensation and worker classification are being handled appropriately, major purchases have been evaluated before they are made, and the company’s legal and tax structure still supports where the business is going.
As businesses grow, these questions can also begin to overlap with succession and estate planning. Ownership transfers, future sales, incapacity, retirement, and the eventual transition of the company may all involve both legal and tax considerations.
That is why September can be such a useful checkpoint.
The goal is not to make a last-minute tax move. It is to enter Q4 with a clearer picture of where the business stands and enough time to make informed decisions before the year closes.
The Law Offices of Beverly Winstead assists Maryland clients with tax planning and analysis, prior-year tax review, business tax planning, business contracts, tax controversies, and estate planning.
This article is for general informational purposes only and does not constitute legal or tax advice. Tax and legal consequences depend on the specific facts and circumstances of each business and owner.