Limit your tax liability and claim valuable opportunities before time runs out
You’re running out of time to maximize your tax position for 2026. Wipfli’s year-end tax planning services can help your business or family limit tax liability and claim valuable opportunities — but often, only if you act by December 31. Wipfli’s seasoned tax advisors will help you make crucial individual or business tax decisions in areas like income and expense timing, retirement contributions, tax incentives, charitable giving, entity structuring and more.
Webinar | November 12, 2026
Individual tax strategy
Learn how high-income individuals can maximize their tax position for 2026. You will:
- Get actionable strategies for reducing your 2026 tax bill.
- Discover tax-efficient ways to give to charity.
- Prepare an estate plan even if you exceed future exemption thresholds.
Join live on November 12 from 1 p.m. to 2 p.m. CT. You’ll also get a recording if you can’t attend.
Webinar | December 10, 2026
Business tax strategy
Find out how to use year-end tax strategies to strengthen your business and shore up your bottom line:
- Learn key year-end planning considerations like entity structure, deduction planning and income timing.
- Explore key market trends that could affect your future tax strategy.
- Discover top tax credits, deductions and incentives that you should know.
Join this live conversation with Wipfli senior tax advisors on December 10 from 1 p.m. to 2 p.m. CT. You’ll also get a recording if you can’t attend.
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Year-end state and local tax planning
As the end of 2026 approaches, many taxpayers are holding tax-planning meetings with their CPAs and financial advisors. Even though federal taxes are important to evaluate, state tax considerations are also a critical part of effective tax planning. Here are several state income and sales tax planning opportunities that businesses and individuals should consider for year-end: Planning for businesses As your business closes out 2026, several state income and sales tax planning opportunities deserve attention now to avoid costly penalties and missed savings later. Economic nexus analysis States’ economic nexus thresholds are based on specific amounts of annual gross revenue from sales to in-state purchasers. Our reference table provides the thresholds for states that use economic nexus concepts. If you expect that your projected 2026 sales in any state will likely exceed that state’s threshold, you can start making estimated payments now and avoid penalties and interest in 2027. Additionally, you can also identify the states in which you are required to collect sales tax and start collecting before uncollected liabilities become significant. Gross receipts taxes Even though tax planning usually conjures thoughts of income taxes, many states impose taxes based on something other than income, such as net worth or gross revenue. Because gross receipts tax liabilities may exist even for businesses that operate at a loss or are exempt from sales taxes as wholesalers, all companies should pay special attention to whether they have nexus in one of the eight states that impose a gross receipts tax. Here are a couple of examples: In states like Washington, the economic nexus threshold is only $100,000. The exposures can add up fast with recently enacted rates of 0.5% for wholesalers and retailers and up to 2.1% for general service businesses. In Oregon, the penalty for being noncompliant with its gross receipts tax for three consecutive years is 100% of the tax. Pass-through entity taxes For S corporations and partnerships, state pass-through entity taxes (PTET) are a great way to help their individual owners save federal personal income tax. Now that Maine has enacted its own PTET, all states with a personal income tax except North Dakota, Pennsylvania, Vermont and Washington, D.C. offer them. The reason for focusing on PTET issues as part of year-end planning is that, in general, state taxes must be paid (not just accrued) by the end of 2026 to qualify for a 2026 federal deduction. In addition, in states like Utah, the PTET election must be made by the end of 2026 to be valid. Sales tax on software and digital goods Currently, California and Colorado (at the state level) do not impose sales tax on electronically delivered software or cloud-based software (SaaS). California also does not impose sales tax on digital goods. However, beginning January 1, 2027, both states will start taxing these products and services. If you have a large software purchase that you were planning on making in 2027, you could benefit from purchasing it in 2026 before it becomes taxable in those two states. If you’re currently subscribed to a software that will become taxable in 2027, you may be able to ask your software provider to bill you for an annual license renewal prior to 2027 in order to realize the sales tax savings. Reverse sales and use tax review Have you been taking advantage of all sales tax exemptions you are entitled to? If you think some purchases may have slipped through the cracks and weren’t purchased without tax, it’s a good idea to conduct a reverse sales and use tax review to identify those and submit a refund claim before they are out of statute. For most states, the statute of limitations is three or four years. If you try to claim a refund for a purchase made before that, the state will automatically deny your claim. Additionally, a reverse sales and use tax review can help identify areas where use tax should have been paid but wasn’t. Identifying use tax deficiencies now can help save on interest and penalties if corrected on your own rather than waiting for an auditor to find them. Planning for individuals: Statutory residency planning As our article on dual residency explains, it is possible to be a tax resident of two states for the same year: one based on domicile (intent) and one based on day count (statutory residency). So, if your time spent in any non-domicile state for 2026 is approaching the 183-day mark, you still have time to plan your travel for the rest of the year to avoid going over that threshold. Otherwise, you may have to file as a full-year resident in two states for 2026. Read more IRS online account guide: How to create an online IRS account for individuals or businesses You earned over $500,000 this year. What are your best year-end tax planning strategies? Major updates in unclaimed property compliance
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2026 year-end tax planning: what to know
As year-end approaches, now is a good time to review income, deductions, investments and business purchases to identify opportunities before December 31. The following items are intended as practical planning reminders; please contact us before taking action so we can evaluate how these rules apply to your specific situation. Review whether you will itemize or claim the standard deduction For 2026, the standard deduction is $32,200 for married filing jointly, $16,100 for single filers and $24,150 for heads of household. Because the standard deduction remains relatively high, many taxpayers will not benefit from itemized deductions unless their mortgage interest, state and local taxes, charitable gifts and other deductions exceed the standard deduction. The 2026 SALT deduction cap is generally $40,400, with additional limitations for taxpayers in the highest bracket. Plan charitable giving before year-end If you itemize, consider completing charitable gifts by December 31 and retaining proper documentation. If you do not itemize, beginning in 2026, you may be able to deduct up to $1,000 of qualifying cash charitable contributions, or $2,000 for married couples filing jointly, in addition to the standard deduction. Higher-income taxpayers should also be mindful of new limits that may reduce the tax benefit of itemized deductions. Coordinate pass-through income and the QBI deduction Owners of S corporations, partnerships, LLCs and sole proprietorships should review projected taxable income, wages, retirement contributions and year-end deductions. The 20% qualified business income deduction has been made permanent, and 2026 planning may involve managing taxable income around applicable thresholds, especially for specified service businesses. Year-end retirement contributions or deductible expenses may help preserve or increase the deduction in the right circumstances. Consider equipment purchases, bonus depreciation and Section 179 expensing Businesses planning to buy vehicles, machinery, equipment, furniture or certain qualified improvements should consider whether assets can be placed in service before year-end. Current rules restore 100% bonus depreciation for qualified property generally acquired and placed in service after January 19, 2025. Section 179 expensing may also provide an immediate deduction, but the best choice depends on taxable income, financing, future profit expectations and state tax treatment. Maximize retirement plan contributions where appropriate Individuals and business owners should review contributions to 401(k), 403(b), SIMPLE IRA, SEP IRA, traditional IRA, Roth IRA and other retirement arrangements. Employer and self-employed retirement plans can be especially valuable because contributions may reduce taxable income while building long-term savings. Closely held businesses should also evaluate whether a new plan or plan design change could provide additional tax and retirement benefits. Solar facilities — December 31, 2027, the placed-in-service date is critical Under IRC §§ 45Y and 48E, the OBBBA generally terminates the clean electricity production credit and clean electricity investment credit for applicable solar facilities placed in service after December 31, 2027, if construction begins after July 4, 2026. Trump accounts — enrollment required The OBBBA created Trump accounts under IRC § 530A for eligible U.S.-citizen children under age 18 with a Social Security number, with contributions permitted beginning July 4, 2026. Under recent regulations, the Treasury Secretary has been provided authority to automatically create an account for all eligible children. But to get the $1,000 in government seed funding for kids born from 2025 through 2028, or to make contributions to their child’s savings vehicle, a parent or guardian must still “claim” the account through the program’s mobile app. Evaluate income and deduction timing Depending on your expected tax bracket for this year and next year, it may make sense to accelerate or defer income, bonuses, business receipts, deductible expenses, charitable gifts or capital transactions. For cash-basis businesses, year-end billing, collections and payment timing can materially affect taxable income. However, timing decisions should be coordinated with cash flow, financing needs, QBI planning, retirement contributions and the availability of deductions or credits. R&D credit and research expense planning Businesses should evaluate potential IRC § 41 R&D credit opportunities and strengthen documentation of qualified research activities by business components. Consider whether the regular credit (generally 20%) or the alternative simplified credit (ASC, generally 14%) is more beneficial and review the IRC § 280C reduced-credit election to manage the interaction between the credit and deductions. Coordinate year-end planning with the treatment of research expenditures under IRC § 174A (generally immediate deduction for domestic R&E, with continued amortization for foreign R&E) and any related method change considerations. Read more You earned over $500,000 this year. What are your best year-end tax planning strategies? IRS making changes to first-time penalty relief The U.S. Court of Federal Claims just threw out COVID-era tax deadlines. Could you gain relief?
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Year-end tax planning for construction companies
For construction companies, year-end tax planning should never be viewed as an exercise in simply reducing taxable income. The most successful contractors approach tax planning as a strategic component of overall business performance, balancing cash flow, capital allocation, bonding capacity, growth objectives and shareholder value. While there have been relatively few legislative developments significantly impacting the construction industry this year, that should not be mistaken for a lack of planning opportunities. In fact, in the absence of major tax law changes, the fundamentals become even more important. As 2026 draws to a close, construction executives should focus their attention on three critical areas: capital expenditure and depreciation strategy, long-term contract accounting considerations and aligning deductions with projected marginal tax rates. Capital investment decisions require more than a tax lens Many contractors are evaluating fleet replacement cycles, equipment acquisitions, technology investments and facility improvements as they prepare for the upcoming construction season. The tax benefits associated with accelerated depreciation remain an important planning tool. However, leading construction companies understand that the objective is not to maximize deductions. The objective is to maximize after-tax returns. Too often, businesses allow tax considerations to drive capital spending decisions. Equipment should be acquired because it improves productivity, expands capacity, reduces operating costs or supports strategic growth initiatives. The tax benefit should enhance the investment decision, not justify it. At year-end, management teams should evaluate: Planned equipment purchases and placement-in-service timing Utilization rates across existing fleets Opportunities to accelerate or defer depreciation deductions State tax conformity considerations Impacts on financial reporting, debt covenants and bonding metrics In a higher-interest-rate environment and with continued pressure on equipment costs, preserving cash remains a critical consideration. The most effective depreciation strategy is the one that supports both the company’s tax position and its capital allocation objectives. The question should not be, “How much depreciation can we generate?” Rather, it should be, “How should depreciation be deployed to achieve the greatest economic benefit?” Long-term contract accounting deserves renewed attention For many construction companies, taxable income is influenced more by project performance and accounting methods than by any individual deduction. Year-end provides an important opportunity to critically assess contract estimates and revenue recognition assumptions. Small changes in estimated project costs can have significant impacts on taxable income, particularly for contractors reporting income under percentage-of-completion methodologies. Construction executives should challenge project teams to revisit: Cost-to-complete estimates Job profitability forecasts Change order assumptions Claims and dispute recoverability assessments Schedule delays and productivity impacts Work-in-process reporting accuracy Periods of economic uncertainty often expose weaknesses in estimating processes. Labor challenges, supply chain disruptions, subcontractor performance issues and project delays can create meaningful variances between estimated and actual project outcomes. Year-end tax planning should therefore begin with an objective assessment of project economics. Accurate contract reporting is not simply a compliance exercise; it is a critical business discipline that affects tax liability, banking relationships, bonding capacity and operational decision-making. Contractors anticipating substantial growth should also examine whether future revenue levels could affect the accounting methods available to them. The best planning opportunities often emerge before a company crosses key thresholds, not afterward. Marginal tax rate planning may be the most valuable conversation of the year One of the most overlooked aspects of tax planning is determining whether deductions are being utilized in the year in which they provide the greatest benefit. For privately held construction companies, tax planning rarely occurs in isolation. The tax position of the business and its shareholders are often directly connected. As a result, management should evaluate whether it is advantageous to accelerate deductions into the current year or preserve them for future periods where higher tax rates or increased profitability may produce greater economic value. Areas commonly considered include: Depreciation elections Owner compensation strategies Retirement plan contributions Timing of discretionary expenditures Cost segregation opportunities Repairs and maintenance analyses State tax planning initiatives The goal is not to achieve the lowest possible tax liability in 2026. The goal is to optimize tax liabilities over multiple years. Sophisticated tax planning recognizes that a deduction is only as valuable as the rate against which it is applied. In some circumstances, accelerating deductions creates immediate cash flow benefits. In others, preserving those deductions may generate a superior long-term outcome. Tax planning should support business strategy The strongest construction companies do not separate tax strategy from business strategy. Capital investments, project selection, growth plans, succession objectives, compensation programs and financing decisions all carry tax implications. When these decisions are evaluated independently, opportunities are often missed. When they are evaluated together, tax planning becomes a tool for enhancing enterprise value. As year-end approaches, construction executives should focus less on identifying last-minute deductions and more on understanding how current decisions will impact future cash flow, profitability and shareholder returns. The contractors that create the greatest long-term value are rarely those that pay the least tax in a given year. More often, they are the organizations that consistently align operational decisions, financial reporting and tax strategy to support sustainable growth. In today’s environment, that alignment may be the most valuable year-end planning opportunity of all. Every construction company faces a unique combination of growth objectives, project risk, capital investment needs and shareholder considerations. The most effective year-end tax strategies are tailored to those specific circumstances and developed before critical decisions are finalized.
Year-end tax planning FAQs
Here’s what business owners and high-net-worth individuals should know about year-end tax planning:
Wipfli’s year-end tax planning services will help you make smarter tax decisions for 2026. This will include guidance on limiting your tax liability, claiming valuable opportunities and using tax strategy to support your long-term goals.
You should begin your 2026 year-end tax planning as soon as possible. After December 31, you will lose much of your strategic tax flexibility.
Year-end tax planning services help you reduce your tax exposure. Making smarter decisions in areas like income timing, expensing, donations, retirement contributions and entity structuring can deliver meaningful tax benefits that make a visible impact on your bottom line.
Wipfli’s tax advisors have spent decades helping businesses and individuals make the most of their year-end tax opportunities. We focus on learning your specific tax goals and designing a strategy to meet them.
Let's talk year-end tax wins
Ask Wipfli to help your business or family reduce tax liability, find valuable tax opportunities and strengthen your bottom line.
