Summer Tax Planning For Small Businesses

Tax planning isn't just for the end of the year or your review at the beginning of a new year. Being proactive and reviewing your tax strategy mid-year can give you a competitive edge and prepare you for success during the 2026 tax season.

WHAT TO LOOK AT

During the summer months, review your deductible business expense records. Every expense you document — travel, meals, entertainment, office supplies, equipment, etc. — can reduce your taxable income. Check your contributions to tax-advantaged retirement accounts. Can you increase them? Doing so may help you take advantage of potential tax deductions and credits.

Ensure your business's quarterly tax reports are filed and paid to the IRS. Review your business's financial situation and project income for the rest of 2026. Estimating your tax liability and making timely payments helps prevent any tax surprises.

MAXIMIZE DEDUCTIONS AND CREDITS

Consider organizing a summer teambuilding event or a client appreciation outing. The costs for these activities might be deductible. Keep thorough records and receipts to substantiate these expenses.

If you have a legitimate business reason to travel somewhere that can be combined with a family vacation, you might be able to deduct your individual business-related expenses, but not those of the family.

Business renovations and improvements are often most effective during the summer months. Consider if this summer is the right time to tackle those projects. Before starting, ensure you know which expenses — like energy-efficient improvements — qualify for tax deductions or credits. This could help lower your potential 2026 tax bill.

ESTIMATE YOUR TAX LIABILITY

One common mistake business and personal taxpayers make during the summer, more than any other season, is underestimating their potential tax liability come year-end.

Underestimating your income can lead to underpayment and potential penalties. Relying solely on online tax calculators or generic tax advice might cause you to overlook opportunities for tax savings. That's why many tax experts recommend you secure professional guidance.