AstuteAdvisorsBook Your Free Consultation

California year-end tax planning

What you can still do before December 31, 2026

The tax moves a California business owner can still make this year, roughly what each one is worth on your numbers, and which close first. Each links to the tool that prices it properly.

Your numbers

Before your own salary.

A spouse's wages and any other ordinary income.

2026 federal figures and the FTB's 2026 California rate schedules. Every figure verified October 27, 2026.

Worked out on your figures

Estimates on the numbers you entered.

Open or fund a retirement plan

Closes Dec 31, 2026

Employer money for an existing plan can wait until Sep 15, 2027 with an extension.

$17,904 - $19,301Estimate on your figures - a solo 401(k)
  • Open the plan by Dec 31 to be safe for California. Federal law lets some plans be opened later, but California generally has not adopted the 2019 law that allows it.
  • Your own 401(k) deferral runs through payroll, so it has to be in the last 2026 payroll.
  • A cash balance plan can add much more for an owner in their forties and fifties - see the Retirement Optimizer.
Compare plans on the Retirement Optimizer ›

Elect and pay the 2026 PTET by Dec 31

Closes Dec 31, 2026

The rest is due Mar 15, 2027, but paid then it is deductible in 2027, not 2026.

$0 - $4,252Estimate on your figures

Depending on your other deductions, this can cost you money rather than save it.

  • If the business missed the June 15 payment, each owner's California credit is cut by 12.5% of their share of the amount that was due then - the greater of $1,000 or half of last year's PTET. A first-time elector loses at most $125.
  • California credits back the tax the entity pays, so nearly all of the value is federal.
Price it on the Entity Clarity Calculator ›

Illustrations: per amount you spend, give or move

Each one is priced on a set amount so you can size it yourself - double the amount, roughly double the figure. They are illustrations, not figures worked out on your own spending.

Rent your home to the business (Augusta Rule)

Closes Dec 31, 2026 - the days must fall in 2026
$3,847 - $4,160Illustration: 14 days at $1,000 a day
  • The business deducts the rent and you owe no tax on it, for up to 14 days a year. It needs real business use, a market rate and records.
  • $1,000 a day is only an illustration. The right rate is what a comparable venue near you charges.
Book a call to set it up properly ›

Put your health insurance on your W-2

Closes with your last 2026 payroll
$2,748 - $2,971Illustration: per $10,000 of premiums
  • A 2% shareholder's premiums have to be paid by the S corporation and be on that year's W-2 to be deductible. Miss it and you pay for your insurance with after-tax money.
  • While you are at it, check your salary is a reasonable one. That part has no figure here - it is a judgment call, not a saving.
Check your salary on the S-Corp Screener ›

Put equipment in service

Closes Dec 31, 2026 - installed and ready, not just ordered
$2,748 - $2,971Illustration: per $10,000 placed in serviceup to $1,891 federal, $1,080 California
  • Ordered, paid or delivered does not count. It has to be installed and ready for use by Dec 31.
  • Federal 100% bonus depreciation. California has none and stops at $25,000 of §179 (less once equipment bought tops $200,000), then spreads the rest over several years.
  • Not for passenger vehicles - their write-off is capped.
Own your building? See what a cost segregation study is worth ›

Bill in January, pay bills in December

Closes Dec 31, 2026
$2,748 - $2,971Illustration: per $10,000 deferred into 2027
  • This is a deferral: it moves tax into 2027, it does not remove it. Worth it mainly if next year's income will be lower.
  • Only for a cash-basis business.
Book a planning call ›

Give to charity

Closes Dec 31, 2026
$843 - $2,645Illustration: per $10,000 given in cash
  • Since 2026, when the law changed, the federal deduction only counts gifts above 0.5% of your income, and top-bracket itemizers lose 2/37 of their deductions. California adopted neither, but caps cash gifts at 50% of income and trims itemized deductions at high incomes.
  • A gift to a donor-advised fund does not qualify for the new deduction for people who take the standard deduction.
Plan it on the Charitable Giving Optimizer ›

Figures entered

Business
S corporation
Profit
$400,000
Salary
$150,000
Filing status
Married filing jointly
Age
48
Other wages
$0
Employees other than you and your spouse
No
Own your home
Yes

Astute Advisors, Year-End Tax Planning Estimator, Oct 29, 2026. Figures verified October 27, 2026. Every figure is an estimate, income tax only, and the figures do not add up to a total. General information, not tax advice.

The figures above don't add up - that's the point of a plan

Each move changes the others, so the real number comes from putting them together on your full return. That is a conversation worth having before December, not in March.

Book a planning call

Every figure verified October 27, 2026 against irs.gov, ftb.ca.gov and the Internal Revenue Code. Nothing you enter leaves your browser. General information, not tax advice.