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Year End Financial Planning: Setting Up for a Strong Start in 2026

Year-End Financial Planning: Setting Up for a Strong Start in 2026

by

Jim Griffing
A Silver Fox Advisor

As 2025 comes to a close, it’s a good time to pause and take a clear look at your financial picture. Whether you run a business or manage your own household finances, year-end is the ideal moment to make sure your tax strategies, investment choices, and planning decisions are aligned with your goals for the year ahead.

This year has brought a mix of new tax rules, changing business trends, and emerging opportunities. Below are a few of the key updates and considerations that can help you prepare for a smooth start to 2026.

Research and Development (R&D) Expenses

Businesses that invest in research, innovation, or product development will benefit from a new rule allowing domestic R&D costs to be fully deductible starting in 2025. This means companies can immediately write off qualifying expenses instead of spreading them out over several years. However, costs tied to foreign research still need to be spread over 15 years. If your business invests in innovation, this could be a good time to review your current projects and plan how to take advantage of this deduction.

Business Income Deductions

The 20% Qualified Business Income (QBI) deduction—which allows certain businesses to deduct part of their profits—has been made permanent, with expanded eligibility for small business owners. This might be a good time to revisit your business structure or partnership agreements to ensure you’re positioned to get the most benefit from this deduction.

Investments and Capital Purchasing

If you’re thinking about investing in new equipment, vehicles, or technology, there’s good news. The 100% bonus depreciation rule—allowing businesses to immediately deduct the full cost of certain assets—has been permanently extended for qualified property acquired and placed in service after January 19, 2025. The Section 179 limit has also been increased to $2.5 million, providing more flexibility for small and midsize businesses. This can be an effective way to reduce taxable income before year-end while investing in your company’s future.

Clean Energy Incentives

Many clean energy tax incentives are set to phase out in the next two years. If you’ve been considering solar panels, or energy-efficient upgrades for your business or personal use, now is a smart time to explore these options. Acting before these credits expire could mean significant savings.

Reporting and Compliance Updates

Starting in 2025, the Form 1099-K threshold for third-party payment platforms (like PayPal or Venmo) will revert to the previous standard of $20,000 and 200 transactions per year. The Form 1099-NEC/MISC reporting threshold for contractors will stay at $600 in 2025 but will rise to $2,000 in 2026. It’s a good reminder to keep your bookkeeping current and double-check vendor records now to avoid headaches next tax season.

Digital Assets

If you hold or trade cryptocurrency or other digital assets, new IRS reporting requirements take effect for transactions in 2025. You may start receiving a new Form 1099-DA in early 2026 from brokers or digital platforms. Even if you don’t receive a form, you’re still responsible for reporting all digital asset transactions. Keeping clear records of purchases, sales, and transfers will help you stay compliant as the IRS increases its oversight in this area.

Overtime and Tips

For 2025, employees in eligible tipped occupations and those earning FLSA-mandated overtime may deduct substantial amounts of tip and overtime income from their federal taxable income, subject to income phaseouts and other requirements. Employers must continue to withhold payroll taxes and report these amounts, but the IRS is providing penalty relief for 2025 as systems are updated to comply with new reporting rules.

Other Smart Year-End Moves

Final Thoughts 

Year-end planning isn’t just about taxes—it’s about taking a proactive look at your overall financial health. By reviewing your business operations, personal finances, and upcoming opportunities now, you can start 2026 with clarity and confidence.

If you have questions about how these changes might affect your situation, consider reaching out to us or another trusted tax or financial advisor. A little planning today can make a big difference tomorrow.

 James “Jim” Griffing, CPA and Silver Fox Advisor

2026 Business Plan and Budget

"2026 Business Plan and Budget"

November 2025

Richard T. Hendee
A Silver Fox Advisor

Last month, I addressed the reasons and elements of a Business Plan. This month I will do the same for the Business Budget.

I will start by saying the same thing I did last month about the Business Plan and that is --- “If you have been in business for a while, you are probably saying, “Why do I need a 2026 Business Plan and Budget”?

And my response last month was - “Your business is probably the largest single asset you have. It is also the source of your family’s livelihood”.  Don’t you want your business to be successful and generate profitability to support your family? If you said yes to these questions, then let’s do something about it to make that happen!

Doing an annual budget and measuring the results monthly is your financial barometer of the success of your business. I do not know of any business owner who is in business to lose money. If you don’t have a budget and measure the actual results, how will you know if you are making money or losing money? I have had some business owners tell me, “If I have money in my checking account, I am making money”. Well, if you have money in your checking account, that means you have cash today, and that’s good, but what about tomorrow and the day after that and so on?

Doing a budget can be overwhelming, but it doesn’t have to be. Some business owners like to start by taking the previous year’s numbers and simply adding some amount or percentage increase to each line item.

I always start with looking at expenses. First, I take all the expenses I know will be the same each month like rent, phone, cleaning etc. Then I look at expenses I know will vary, like utilities which likely will be more at certain times of the year, e.g. electricity in the summer months will be more because the air conditioner is running more then. If there are loan payments, I look at what the interest payments will be each month and include that amount (principal loan payments are not an expense item. Principal payments come out of profits). Payroll expenses can be the same each month if you have all salaried employees. Hourly and part-time employee costs will vary and may be seasonal. 

Once you have expenses calculated, then move to the revenues side of the profit and loss statement. Start by looking at what revenues need to be each month to cover all the expenses you calculated. Then, look at what the revenues were each month the prior year and see if you need a big increase in revenues to cover the expenses. If you don’t anticipate big revenue increases happening. then you probably need to look at what expenses can be reduced to cover those expenses.  Also, don’t forget about how much in the way of profits do you want to generate. Add that amount in to then see where revenues need to be to cover the expenses and generate the profitability you want to achieve. This all may sound complicated, but once you get involved in the process, it is really not.

Now that the budget is built, each month you should measure the actual results to the budgeted numbers and determine if you are on track or need to make some adjustments. Additionally, this monthly assessment can be very helpful if say half way through the year you have an unexpected expense that you need to cover, and you want determine if you can afford that need. Simply look at the expense categories that you are under budget on, and you may discover you can afford that unexpected expense and still be on budget overall. At the very least you will be making more educated decisions instead going on a hope and prayer, although in some cases the prayers may be of great help also!

If you need assistance in working through your “”2026 Business Budget”, I recommend you start by contacting the Silver Fox Advisors. Silver Fox Advisors are former or present business owners themselves, and they have experience in running a business, and in some cases several businesses, and they have lots of experience developing Business Budgets. We encourage you to visit our website at www.silverfox.org to select a Silver Fox Advisor and also to learn more about the Silver Fox Advisors, as well as our great programs and community outreach endeavors.