The big tax deadlines are behind us. Extended S Corp and partnership returns were due September 15, and extended individual returns were due October 15. That makes now the right time for year-end tax planning for NYC business owners, while there is still time to act.
You have about two months left in 2026, and that is enough time to make real decisions that lower your tax bill. Once January 1, 2027 arrives, most of those options are gone.
Here is what year-end planning looks like for New York City and New York State business owners, and a checklist of what to review before December 31.
What Year-End Tax Planning Means for New York City Business Owners
Tax planning has two goals.
The first is to minimize your taxes. That means using every legitimate strategy available to you while you still have time to act, such as retirement contributions, the timing of payments, and how you pay yourself.
The second is to prepare for the taxes you will owe. Even after planning, most profitable business owners will have a balance due. The goal is to know that number now, make a plan to pay it, and avoid surprises.
Nobody wants to find out on April 15 that they owe a large amount they did not expect. That is a stressful way to start the spring, and by then there is very little you can do about it. In New York City, where business owners can owe federal, New York State, and New York City income taxes, plus entity-level taxes like the Unincorporated Business Tax, a surprise can be expensive.
Your 2026 Year-End Tax Planning Checklist
1. Get a Tax Projection From Your Accountant
Your accountant should be able to tell you, based on your numbers through September or October, roughly how much tax you will owe for 2026. This is the foundation for everything else on this list.
A projection answers practical questions. Have your estimated payments been enough? Will you owe at the end, and how much? Is there room to lower the bill with a retirement contribution or another move? Without a projection, you are guessing.
If your books are not current, this is the first thing to fix. A projection is only as good as the numbers behind it.
2. Adjust Your Final Payroll of the Year
For business owners on payroll, the final payroll of the year is one of the most important tools in year-end planning, and one of the most overlooked.
Based on your accountant’s projection, your last payroll can be used to do two things. First, adjust your salary. If your business is an S Corp, the IRS expects owners who work in the business to take a reasonable salary for the work they do. Pay too little and you risk problems in an audit. Pay too much and you may be paying more payroll tax than you need to. Your accountant can tell you whether your 2026 salary is where it should be, and the final payroll is your chance to correct it.
Second, pay in additional taxes. If your projection shows you are short on federal or New York State taxes, you can increase the withholding on your final paycheck to cover it. This is often better than making a larger estimated payment, because withholding is generally treated as if it were paid evenly through the year. That can help reduce or eliminate underpayment penalties, even if the money goes in at the end of December.
Timing matters. Payroll can technically run up to the end of the year, but providers need processing time and the holidays shorten the calendar. Realistically, aim to run your final 2026 payroll by December 24. Once the year ends, payroll for 2026 is closed, and these adjustments can no longer be made.
Your salary also affects other planning, including how much you can put into certain retirement plans.
3. Make Your Tax Payments Before Year-End: Estimates, PTET, and NYC Business Taxes
When you make a tax payment can matter as much as how much you pay. Here is what to look at before December 31.
Estimated payments. If you are not on payroll, or your projection shows you still owe after adjusting your payroll, a larger fourth quarter estimated payment is the other way to catch up. The federal and New York State payment is due January 15, 2027, and NYC personal income tax for city residents is paid along with your New York State estimates. The goal is not to overpay. It is to avoid a large balance and penalties in April.
PTET. If your partnership or S Corp elected into the New York State Pass-Through Entity Tax (PTET) for 2026, and the New York City PTET if you qualify, the business deducts it on its federal return in the year it is paid. Paying the fourth quarter estimate by December 15, or any additional amount by December 31, puts the deduction on your 2026 return. If you wait and pay the balance with the return in March, the deduction moves to 2027, and you wait an extra year for the benefit. If you did not elect PTET for 2026, put it on your list for 2027. The election is due by March 15 of the tax year.
NYC UBT and corporate tax. The same timing applies to New York City business taxes. If your business pays the NYC Unincorporated Business Tax (UBT), which applies to sole proprietors, LLCs, and partnerships doing business in the city, or NYC corporate tax (the General Corporation Tax for S Corps, since New York City does not recognize S Corp status, or the Business Corporation Tax for C Corps), those taxes are deductible on your federal return in the year they are paid if your business uses the cash method. Paying before December 31 moves the deduction into 2026. Unlike the personal state tax deduction, these business taxes are not subject to the federal SALT cap, so paying on time is a direct benefit.
Personal state taxes. If you itemize, paying your fourth quarter New York State estimate in December instead of January may let you deduct it on your 2026 federal return. Whether that helps depends on your income.
Your accountant’s projection will show what you owe, how much to pay, and when to pay it for each of these.
4. Make a Retirement Plan Contribution
Retirement contributions are one of the most effective ways for NYC business owners to lower taxes, and some of them depend on acting before December 31.
For example, if you are an S Corp owner contributing to a 401(k), your salary deferrals generally have to come out of payroll during the year. That cannot be done after the year ends. Other contributions, such as the employer portion of a 401(k) or a SEP IRA contribution, can often be made later, up to the filing deadline, but you still want to know the amount now so you can plan your cash.
If you do not have a plan in place, year-end is a good time to talk about which one fits your business. We covered the options in our guide to retirement plans for self-employed NYC business owners.
5. Reimburse Yourself for Business Expenses
Many NYC business owners pay business expenses personally: mileage, a cell phone, supplies bought on a personal card. If your business has an accountable plan, it can reimburse you for these costs. The business gets the deduction, and the reimbursement is tax-free to you.
Submit your expenses with documentation and have the business pay you before December 31 so the deduction lands in 2026. If your business pays you rent for a home office, make sure those payments are made before year-end as well. We covered how that works in our guide to the home office deduction.
6. Consider Prepaying Expenses
If your business uses the cash method of accounting, which most small businesses do, expenses are generally deducted in the year you pay them. That gives you some control over timing.
Paying for supplies, services, or certain upcoming costs in December instead of January can move the deduction into 2026. There are limits. In general, a prepaid expense should cover a period of no more than 12 months, and you should only buy things the business actually needs. Spending a dollar to save thirty or forty cents in tax is still spending a dollar.
The same idea applies to equipment. A computer, furniture, or other equipment placed in service before December 31 may be deductible on your 2026 return.
7. Look at the Timing of Income
Timing works on the income side too. If your business uses the cash method, income is generally taxed when you receive it. Sending late December invoices in early January, so payment arrives in 2027, can push that income into next year.
There are limits. You cannot hold a check you already received and call it next year’s income, and deferring only makes sense if you do not expect to be in a higher bracket in 2027. If next year looks bigger, it may be better to bring income into 2026. This is another place where your projection guides the decision.
8. Get Your Books Buttoned Up
Clean, current books make every item on this list possible. Before the year ends, make sure bank and credit card accounts are reconciled, personal expenses are separated from business expenses, and anything unusual has been flagged for your accountant.
This is also a good time to collect W-9 forms from any contractors you paid this year, so 1099s can go out on time by January 31. Getting this done now makes your 2026 tax return faster and less expensive to prepare, and it means fewer questions in March.
Key New York State and NYC Dates Through Year-End
- December 24, 2026: Realistic target for running your final 2026 payroll, with any salary and withholding adjustments your accountant recommends. Not a formal deadline, but it leaves time for processing around the holidays.
- December 31, 2026: Last day to pay New York State PTET, NYC UBT, and NYC corporate tax and deduct it on your 2026 return
- January 15, 2027: Fourth quarter federal and New York State estimated tax payments due for individuals
- January 31, 2027: 1099s due to contractors and W-2s due to employees
- March 15, 2027: S Corp and partnership returns due, and the deadline to elect PTET for 2027
- April 15, 2027: Individual returns due
Don’t Wait Until April 15
The difference between tax planning and tax preparation is timing. Preparation looks back at what already happened. Planning looks ahead while there is still time to change the outcome.
Once January 1, 2027 arrives, most of the decisions on this list are locked in. Now is the time to get your projection, adjust your final payroll, make your PTET and NYC business tax payments, make your retirement contribution, reimburse yourself, and get everything buttoned up so there are no surprises in April.
For broader strategies beyond year-end, see our guide on how to minimize taxes as a New York City business owner.
If your current accountant only reaches out at tax time, it may be worth asking whether you have the right support. For New York City business owners, year-end planning should be part of an ongoing relationship, not something that happens after the year is already over.
Meir Spear is a CPA and CFP based in New York City. He specializes in New York City and New York State taxes, working with small business owners on tax planning, entity structuring, and accounting. Schedule a consultation
