7 Moves Every Business Owner Should Make in Q1 to Lower 2026 Taxes

Most business owners wait until the end of the year to think about taxes. By then, the biggest opportunities are already gone.

The truth is simple: tax savings are created early, not late.
What you do in the first quarter often determines whether you overpay the IRS or keep more of what you earn.

Here are seven smart moves every business owner should consider in Q1 to lower their 2026 tax bill.

1. Review Last Year’s Return With a Planning Lens

Your prior-year tax return is not just a filing document. It is a roadmap.

In Q1, review it to identify:

• Where you paid the most tax
• Which deductions were missed or underutilized
• Whether your income structure is working against you

This review should answer one question: What should we do differently this year?

2. Confirm Your Business Structure Still Makes Sense

Many business owners outgrow their original entity without realizing it.

If your profits have increased, Q1 is the right time to evaluate whether your current structure is costing you unnecessary self-employment or payroll taxes. Changes made early in the year have the greatest impact over the next twelve months.

3. Set Up or Adjust Owner Compensation

How you pay yourself matters. A lot.

In Q1, business owners should review:

• Salary vs distributions
• Payroll setup and timing
• Whether compensation aligns with IRS guidelines

Waiting until December to fix this is one of the most common and expensive mistakes we see.

4. Clean Up Bookkeeping Before Bad Data Snowballs

Tax planning relies on clean, accurate books. If your bookkeeping is behind or messy in Q1, every decision you make later in the year is based on flawed information.

Early cleanup allows you to:

• Track deductions correctly
• Monitor cash flow accurately
• Make mid-year tax moves with confidence

Strong bookkeeping is not busywork. It is a tax strategy.

5. Map Out Major Purchases and Investments

If you plan to buy equipment, vehicles, technology, or property this year, Q1 is the time to plan the timing.

Strategic timing can determine:

• Which year you deduct the expense
• Whether depreciation or expensing makes sense
• How purchases affect cash flow and taxes together

Unplanned purchases create missed opportunities. Planned purchases create leverage.

6. Establish a Tax Savings System

One of the biggest stress points for business owners is writing unexpected tax checks. Q1 is the right time to build a system that prevents that.

This means:

• Setting aside taxes intentionally
• Forecasting payments throughout the year
• Eliminating surprises

When taxes are planned, they stop being disruptive.

7. Schedule Quarterly Tax Planning Reviews

Tax planning is not a once-a-year activity. The most successful business owners treat it as an ongoing process.

Quarterly reviews allow you to:

• Adjust for higher or lower income
• Capture deductions as they arise
• Stay ahead of deadlines instead of reacting to them

This is where proactive tax planning truly separates itself from tax preparation.

The Bottom Line

Q1 decisions compound. Small adjustments made early can lead to massive tax savings by year-end.

The business owners who win at taxes are not luckier. They are earlier.

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👉 Want to know which of these seven moves will save you the most money in 2026? Book a Free 15-Minute Consultation and we’ll map out your Q1 tax strategy together.