Oct 16 – Dec 31 · Planning Season
2026 Year-End Planning Summary
~$208K–$269K of federal tax addressed across 5 quantified opportunities (cash-balance/DB plan, §199A QBI capture, bonus depreciation, CA PTET election, and the reasonable-comp reset that unlocks the first two), plus two constraints that gate them — stock basis is nearly exhausted, and the self-rental to the S-corp is recharacterized as non-passive. The buyout structure and multi-state nexus remain to resolve before filing. Figures are additive at the item level; the DB and §179 deductions reduce QBI, and roughly $138K of §179 suspends until basis is restored, so the combined result is modelled net at engagement.
Each move as a range, stepping down from the current-path liability.
Cash-balance plan paired with the 401(k) to shelter the spike year
Reset reasonable compensation — the lever that unlocks the plan and QBI
Capture the §199A QBI deduction (non-SSTB, wage-limited)
Restore stock basis before year-end — distributions have nearly exhausted it
Section 179 / 100% bonus depreciation on the equipment expansion
Self-rental income is recharacterized as non-passive — passive losses cannot absorb it
Elect the California pass-through entity tax before the June 15 prepayment
Structure the Larkin Studio stake acquisition for an inside basis step-up
Addressed by the plan
4 of 8 quantified · 4 enable the rest without a separate figure
Time-sensitive moves before December 31.
Multi-year planning to revisit beyond this season.
Items to resolve before the client conversation.
New clients in another state can create income-tax nexus and a filing or apportionment obligation for the S-corp and its owner. Whether this rises to a filing requirement depends on where the work is performed and the destination state's economic-nexus thresholds, which must be confirmed before the return is prepared.
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