A big profit year should feel like a win. For a lot of business owners, it feels like
something else too: a quiet dread about what the tax bill is going to look like.
You worked hard for that number. The goal now isn’t to make it disappear on paper. It’s
to make sure you’re not handing over more than you have to, simply because nobody
sat down and planned for it. That’s what deduction stacking is. Not a loophole, not
guesswork. A set of legal, well-timed moves that keep more of what you earned in your
business, where it belongs.
At J.R. Martin & Associates, this is a conversation we have often, especially with
owners who are surprised by their own success. Here’s where to start.
Why Does a Good Year Suddenly Feel Complicated?
Because the tax code doesn’t reward profit the same way your bank account does. The
more you make, the more decisions matter, and most owners don’t find out which
decisions mattered until it’s too late to change them.
This is completely normal. Nobody starts a business to become a tax strategist. You
started it to build something. Many year-end moves need to happen before December
31, but some planning decisions and contributions may have deadlines that fall after
year-end. The key is to review your options early enough to know which deadlines apply
to you.
What Does It Mean to “Accelerate Expenses”?
If your business runs on a cash basis, timing is one of the simplest levers you have.
Accelerating expenses means paying for things now instead of waiting until next year,
so the deduction lands in the year you actually need it.
A few ways to do this:
– Pay vendors early instead of waiting for standard terms
– Stock up on supplies you’ll need anyway
– Prepay rent, if your lease allows it
None of this is about spending money you don’t need to spend. It’s about moving
planned expenses into the year where they’ll do the most good.
Think of it this way: if you already planned to buy qualifying supplies or pay a deductible
business cost early next year, paying it before year-end may move the deduction into
the current year. But the deduction has to follow the tax rules for that specific cost;
inventory, prepaid items, and larger purchases can be treated differently.
Should I Push Some Income Into Next Year?
For some cash-basis businesses, it may be possible to defer income by timing a bona
fide billing, delivery, or contract milestone for January rather than December. But you
cannot defer income that you have already earned and can access without meaningful
restriction.
A few examples: pushing a December invoice out a few days, or delaying a contract
signing until the new year. This only makes sense when it’s legal and it actually helps
your bigger picture. Deferring income that pushes you into an even higher bracket next
year, for instance, can work against you. This is a step to run by your accountant, not
one to guess at on your own.
The timing must reflect a real business arrangement, not an attempt to ignore income
that has already been earned or made available to you.
What Is Bonus Depreciation, and Could It Help Me?
If you bought qualifying equipment, vehicles, or other eligible business property this
year, bonus depreciation may be one of the largest deductions available. Under current federal law, eligible property may qualify for a 100% first-year deduction, but the result
depends on the asset type, business use, acquisition date, and other tax rules.
The timing matters because the asset generally must be placed in service—ready and
available for its intended business use—by year-end. A landscaping company that
purchases a qualifying truck in November and puts it into business use before year-end
may have a different result from one that waits until January, subject to the vehicle and
business-use rules.
Are Retirement Contributions Really a Tax Strategy?
Often, yes. Contributions to a qualifying pre-tax retirement plan can reduce current
taxable income while helping you build long-term savings, but the available deduction
depends on your business structure, plan design, compensation, and contribution limits.
Depending on your business structure, that could mean:
– A SEP IRA
– A Solo 401(k)
– A defined benefit or cash balance plan for owners with consistently high income who
are prepared for the plan’s funding and administration requirements
These aren’t just retirement tools. They’re deductions that build your future at the same
time they lower this year’s bill. A business owner who maxes out a Solo 401(k) in a
strong year isn’t just lowering a tax bill. They’re putting real money away for themselves,
something that’s easy to put off when the business always seems to need it more.
The right plan depends on your income, whether you have employees, and how much
you want to set aside. The IRS has a helpful overview of the options available to self-
employed business owners, linked at the end of this post.
What Is the PTE Election, and Why Does It Matter in High-Tax States?
If your business operates in a state with high income taxes, this one is worth a serious
look. The pass-through entity, or PTE, election can let your business deduct state taxes
at the entity level, instead of losing part of that deduction on your personal return.
This strategy exists because of a federal cap on how much state and local tax
individuals can deduct personally. The PTE election works around that cap for business
owners in states that allow it. Whether it applies to you depends on your state and your
entity structure, which is exactly the kind of detail worth reviewing with your accountant
before year-end.
If you’re a business owner in California, the June 15 first-payment deadline still matters.
For 2026 through 2030, an eligible entity may still make a valid PTE election after a
missed or insufficient June 15 payment, but affected owners generally must reduce their
California PTE tax credit by 12.5% of their pro rata share of the required amount that
was unpaid as of June 15. That is still a meaningful cost of waiting. We flag the deadline
early so eligible clients can preserve the strongest available result rather than
discovering the issue at return-preparation time.
How Can We Help You Keep More of What You've Earned?
None of this is guesswork. It’s strategy, and timing is what makes it work. A move that
helps in November might not help in February, which is why these conversations need
to happen before the year closes, not after.
Your facts matter here. Every business is different, and the right combination of these
five steps depends on your numbers, your entity structure, and your state. That’s why
we always recommend talking with a qualified adviser about your specifics before you
move forward.
J.R. Martin & Associates offers comprehensive tax planning, strategic tax advice,
bookkeeping, and business consulting built around where your business stands right
now. Let’s work together to make sure this year’s success stays where it belongs, with
you. Explore your options at jrmartinscpa.com.
For general information on retirement plan options for business owners, visit the IRS
guide: https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people