A business tax plan is a short written document that lists the moves that will lower your tax bill, what each one is worth in dollars, and the date each one has to happen. Tax preparation reports on a year that is over. A tax plan works on the year that is still open.
Greg Neilsen, JD, LLM (Master of Laws in Taxation), reviews our tax guides. Last reviewed: September 30, 2026.
Five points. Each one is explained below.
It is the answer to one question, written down: what should this business do before the deadlines to pay the least tax the law requires? A good plan fits on one or two pages. It names the move, puts a dollar estimate on it, and sets the deadline and who owns it.
Example: “Buy the second trailer before December 15. Estimated tax savings: $3,500. Owner signs the purchase by December 1.” That is one line of a plan. A plan is a handful of lines like it.
Tax preparation looks back. It reports what already happened, and by April most of the choices are gone. A tax plan looks forward, while the choices are still open.
Example: In March, a preparer can only report the $70,000 truck the owner bought on December 28. In October, a plan could have compared buying it in December against buying it in January, and picked the year where the deduction was worth more.
Twice a year at minimum. In the fall, to set the year-end moves while there is still time to act. Early in the year, to set estimates, owner pay, and the purchases for the year ahead. A quarterly check keeps it honest when the year changes course.
Illustration only. The numbers are made up. A landscaping company, one owner, taxed as an S corporation. Projected 2026 profit: $210,000. Owner salary today: $45,000. Here is a one-page plan for the fall.
| Move | Estimated effect | Deadline | Who |
|---|---|---|---|
| Buy the trailer and second mower the business needs ($28,000), in service by December 15 | About $6,200 less federal tax at a 22 percent bracket | Delivered by Dec 15 | Owner |
| Raise owner salary from $45,000 to $70,000 through December payroll | Supports reasonable pay; adds about $3,800 of payroll tax | Last December payroll | Payroll provider |
| Compare a SEP IRA and a 401(k), including the cost of covering the crew | Priced in November | Plan choice by Dec 31 | Zero Tax |
| Add $8,000 of federal withholding to the December paycheck | Covers the safe harbor; no underpayment penalty | Last December payroll | Payroll provider |
| Collect W-9s from 4 subcontractors paid $2,000 or more | 1099-NECs filed on time | W-9s now; 1099s by Feb 1, 2027 | Bookkeeper |
| List $85,000 of equipment for the county tangible property return | First $25,000 exempt | April 1, 2027 | Zero Tax |
Six lines. Each one has a number and a date. That is what makes it a plan and not a list of ideas. Download the sample plan (PDF).
A business with simple books, no employees, and steady income can build a basic plan with the right software and a free afternoon. Once there is payroll, equipment, an S corporation, or a year that swings, the dollar estimates need someone who runs these numbers every week. The cost of a missed move is usually larger than the cost of the plan.
In our Planned plan, the written tax plan is included: built at signup and refreshed every fall, with the moves, the dollar estimate for each, and the deadlines. On our Covered plan, a tax plan is available as an add-on. Read more about our tax planning service.
Start with the year-end tax planning checklist, or see how we work with landscaping companies.
A short written document listing the moves that lower your tax bill, the dollar estimate for each, and the deadline for each. It works on the current year, while choices are still open.
At least twice a year: in the fall for year-end moves and early in the year for estimates and purchases. A quarterly check catches a year that changes course.
No. Tax preparation reports on a year that is over. A tax plan sets the moves for a year that is still open.
Yes. A plan uses the choices the tax law already gives you: when to buy equipment, how to pay yourself, how to fund retirement, and when income and expenses land. It does not hide anything. It times things.
The books through the latest month, last year’s return, the payroll reports, and a list of what you plan to buy or change this year.
This guide is educational and is not tax advice for your situation. Tax rules change, and the right move depends on your numbers. Talk to a tax professional before you act.
Greg Neilsen, JD, LLM (Master of Laws in Taxation), reviews our tax guides. Last reviewed: September 30, 2026.
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