Tax Filing Season 2026: Last-Minute Planning Moves for Individuals and Business Owners

In today’s episode, we’re tackling these topics:

🧾 HSA and IRA contributions you can still make for last year

⏳ Why income limits matter before funding Roth or IRA accounts

🏦 Safe harbor rules, extension payments, and avoiding penalties

🏢 Business owner deadlines, S-corp elections, and retirement plans

🔍 Common filing mistakes: 1099 errors and excess contributions

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The Hosts:

Kevin Kroskey, CFP®, MBA – About – Contact

Tyler Emrick, CFA®, CFP® – About – Contact

Episode Transcript:

Tyler Emrick:

Tax filing season is here. And even though most tax planning happens before year-end, there are still some important moves you can make before filing your ’25 return. Today we’re covering last minute planning moves that still matter for individuals and business owners during the 2026 filing season, including how to avoid penalties, catch common mistakes, and tighten up your return before it’s final.

Walter Storholt:

Back at it on Retire Smarter. Walter Storholt here alongside Tyler Emrick, certified financial, chartered financial analyst, one of the wealth advisors at True Wealth Design. Find us online at truewealthesign.com. It is tax filing season already upon us here, Tyler. So the next few months, I know we’re going to be a little busier for you guys as you analyze things and have lots of conversations with your clients. But it’s also a great time of year for you, I would imagine, because you get this forced check-in with your financial health and how things are going, right?

Tyler Emrick:

No, absolutely. And albeit most of the planning is already done, right? That’s at Q4 prior year, get it in before year-end. There are still some meaningful moves that individuals, families, business owners can take here before they start to actually file that 2025 return. So that was kind of the crux of the podcast today and the YouTube channel, just kind of getting into what are some of those meaningful ideas and meaningful things you should be doing before you kind of hit that submit button on your old tax return.

Walter Storholt:

Yeah. And like you said, this is a time where people can also make mistakes, not necessarily all about making the right move. Sometimes it’s just not making the wrong move during these times. So I know you’ll break all that down for us. Where do you want to start?

Tyler Emrick:

Yeah, we’ll start with some of the easy, the blocking and tackling, right? And these are like some of the things that I guess you can still do for the prior year. We’ve turned the corner, we’re into 2026, but these are still on the table for the vast majority of us, if not all of us, to still take care of. And the things that are come to mind are our contributions to our savings accounts. So the first one, Walt, would be like our HSA contributions. We can still make HSA contributions for tax year 2025. Your HSA contributions for individuals still working probably are going to come up on your W2. You can take a look at what the employer put in, what you put in. And if there’s any gap there between those limits, then of course you can still make those contributions up until mid-April or when you file and complete your return. Remember those HSA contributions are going to lower your taxable income and save you a little bit there in taxes on your 2025 return.

The contribution limits, just in case, obviously they’re easily available, but for individuals, 4,300, for family, 8,550. And then if you are over 55, you do get a separate catch-up contribution. And one little tricky caveat, if you are married and you have a spouse, and let’s say you cover a family plan through your employer where you’re contributing to an HSA, and you’ve put in the family maximum plus your catch-up contribution, well, your spouse can open a separate HSA and put in a separate thousand dollars if they’re over 55 to their own HSA account not tied to your employer. So kind of keep that in mind as you think about, “Well, hey, what is that total limit that I can put into an HSA for 2025?”

The next big one, well, yep, our IRAs and our Roth accounts, right? Same thing, right? We can go back to 2025, do those contributions if we want to. Standard contributions, 7,000 for last year, plus the $1,000 catch-up contribution if you’re over 50. Now, we got to remember some caveats here when we start thinking about our IRAs and our Roth IRA accounts, because those contributions are all subject to certain income limits. So we have a lot of families where we might wait until we’ve mocked up the 2025 tax return before we make a recommendation on, “Hey, can you do a Roth contribution?” Or, “Hey, do we have to do it as a backdoor Roth contribution?” Or, “What are some of the options that are afforded to you?” Because of course, as we look at Roth accounts, if you make too much money, those contributions, you might not be able to directly contribute to a Roth.

And same thing for an IRA, right? If your income’s too high, you actually can still contribute to an IRA, but you might not be able to actually take the tax deduction for it. So just being mindful of those. Obviously, you’re getting all your tax documents kind of coming in. It’s the beginning of February, so those are probably starting to come in now. Well, you can start to put those together, formulate where your income’s going to be and kind of make some of those final decisions on your HSAs and your IRA accounts that you have out there.

Now, for those small business owners or self-employed individuals that might be listening, you might have a few other options to kind of take it a little bit further, right? For those individuals that are using solo 401k accounts or even 401k accounts for the small business owners, your deferral contributions, so what you put in as the employee does have to be in by the end of the year, but while of course we can go in and potentially do profit sharing contributions for the prior year still to those plans, which are extremely beneficial, especially for those self-employed individuals. And then for those individuals that are actually taking the retirement plans one step further from just your typical 401k and actually have a cash balance pension plan, obviously those contributions for the prior year typically don’t have to go in until you actually file your return or if you go on extension can be done there too.

So a ton of planning around those cash balance pension plans, I mean, while we’ve got individuals making six figure pre-tax contributions to those plans to lower their income. So you start thinking about actually truly, “How can I effectively drop my tax bill for the prior year?” You start putting away $100,000 or more pre-tax into a cash balance pension plan that can save you a substantial amount of pre-tax money for those individuals that are self-employed or small business owners. So those retirement plan HSA contributions I think are a big, even more than a housekeeping item for some individuals. They can certainly still get ironed out and there’s still some planning opportunities for those right now.

Walter Storholt:

Just a quick procedural question back to the HSA one that just popped into my mind, because that would likely be recorded on your W2 from your employer. So if you end up going back, do you need to get like an amended W2 or is all of that just handled when you file your taxes?

Tyler Emrick:

When you file, yep. But you do need to communicate that with your tax preparer because they’re going to look at your W2 for that HSA contribution that’s already deducted off of there. If you went in and made a separate contribution outside of your payroll to those plans, they’re not going to necessarily know about it unless you tell them because a lot of times those tax documents aren’t prepared and given out until spring, summertime for the prior year. So yeah, you just want to make sure that you’re letting your tax preparer know.

I think another big one here, Walt too, as we kind of think about savings would be the other thing is like, well, what about pay-ins, right? So for those of you that do estimated tax payments quarterly, you know that your fourth quarter payment has to be in by mid-January. So we’re pretty much done with quarterly payments, but for those of you that are going to go on extension for the tax year 2025, of course you can still make an extension payment or a tax payment with that extension filing, excuse me, to make sure that you get enough pay-ins for the prior year. So I think this is certainly a planning opportunity as you think about, well, how much do you actually need to get paid in and when should you make sure that pay-in?

For those of you that are W-2 individuals, and a lot of that might be set in stone, some of that flexibility might go away, but for any listeners that have big taxable brokerage accounts that have big investment gains in them, big interests that hit their tax return, you’re self-employed or you own your small business, obviously you’re probably intimately familiar with estimated payments to get additional monies paid in. And I think understanding those safe harbor rules is extremely important as you think about the timing. Safe harbor rules is where the IRS kind of looks back on the prior year and says, “Hey, how much do we want to insure gets paid in taxes throughout the year?” And to make sure that those pay-ins are kind of done in a equitable manner over the year, right?

But they have a couple rules that basically say, “Well, hey, as long as you get X amount paid in, then we’re not going to hit you with any penalties,” and then you can kind of clean up and make a larger payment with your extension. So what that allows individuals to do is, hey, keep more money in interest bearing or investment accounts, more money in your pocket, pay it when it’s due, as opposed to kind of having it sit over with the IRS and letting them earn the interest or use your money from there. So those safe harbor rules, generally when you look at your prior year tax return, you got to pay in 90%, excuse me, either 90% of your current year tax or 100% of your prior year tax liability to kind of qualify for those safe harbor rules. For those high income earners, you actually got to pay in 110% of that prior year tax liability.

So getting down into some of the granularity and understanding how much needs to get paid in will help you not only avoid penalties, but better cash management. We just did a podcast on cash management and the sizing and management. I think this all kind of plays in together as we kind of think about how do we want to be using our cash and when do we want to get some of these payments in? So I got the payments, extension, safe harbor rules is another kind of caveat to be looking at.

The couple other things I want to make sure that we bring up here too that I think are extremely important, especially for those small business owners, self-employed individuals. There are some deadlines earlier in the year, especially in Q1 that we need to be mindful of. I think the biggest one that I run into most years is what we call an S corporation election deadline coming up in mid-March. So some individuals, if you’re self-employed or you have your own business, certainly you have an entity like an LLC, and then you have to make a choice on how you want to necessarily be taxed. Do you want to be taxed as a sole proprietor or an S corporation or C corp? Well, those elections for the S corporation have to be done here by mid-March. So this can have a ton of ramifications for individuals on what retirement plans that they can use, how much wages they take, how that kind of hits down through the return and what the taxes are on the money that they earn by working through on contract or working through the business.

So I think that the business, some of that business planning early in the year is extremely helpful. And if you need to maybe make that election, getting that in so that way you’re prepped for the upcoming year for 2026 and making sure that your entity’s going to be taxed the way that you should, or you want it to, that’s going to be the most tax efficient way for you to do it.

Walter Storholt:

Is that a year to year decision, Tyler, for companies? Can you flip-flop between how you want to be taxed each year appropriately?

Tyler Emrick:

Yeah. There’s certain things to be mindful of, but yes, but generally you have some flexibility here to be able to do it. And the big one would be is as your businesses or your self-employment continues to grow and do better and better and better, a lot of times what we’ll do is we’ll start you out and you’ll just have that come through what we call your Schedule C on your tax return, sole proprietor, but then as your income continues to grow, just with the way the tax code works, there’s some certain advantages to potentially hold yourself out as an S corporation with payroll taxes and the QBI deduction and some of these other things. So that interplay becomes very, very important.

So a lot of those conversations we’re trying to have at the end of Q4 is in preparation for, “Hey, do we need to make that election?” But if you haven’t looked at that in a while, you just kind of take your tax documents and, “Hey, this is what I made by working my contract job over the last year.” Being mindful of that and bringing that up I think is extremely important because there are certainly some tax savings that we had there.

Speaker 3:

What would your life look like if you designed it around your true wealth? It’s a powerful question and one that True Wealth Design helps individuals, families, and business owners answer every day. With a fully integrated approach to financial planning, tax strategy, investments, and business advisory, their team can bring clarity and confidence to every part of your financial life. Take the first step toward a stronger financial future with a no cost, no obligation discovery meeting. Just click the link in today’s show description to get started.

Walter Storholt:

You can see why taxes is a tough nut for a lot of people, right? We’re talking about 2025’s taxes kind of done, but yet the caveats of there’s still a few things you can still do. And at the same time we’re trying to think of doing all of that, we’re already thinking about this year and what can we do this year to plan and even starting to probably think about next year as well? You got to consider so many years all at one time.

Tyler Emrick:

The deadlines, all these deadlines.

Walter Storholt:

And there’s deadlines all over the place.

Tyler Emrick:

And your business changes and your position might change. I mean, there’s just all sorts of things to continue to work on. I mean, frankly, that’s probably why most families work with us on an ongoing year in and year out basis because these things do changes. I mean, shoot, we just had the big tax legislation change come last year that are affecting of everybody’s return when they go to file it this year, whether it’s the increased SALT deduction, there’s a multitude of things that you can kind of ring out for the prior year that are going to impact individuals. So we want to be mindful of them. And if there’s an opportunity, take advantage, Walt.

Walter Storholt:

I do have an admission to make. So I have never and never want to make any contributions this year that apply to last year, just for the cleanliness reasons.

Tyler Emrick:

That’s fair.

Walter Storholt:

I want it to fit into a nice basket. So I’ve always avoided doing any sort of like, “Oh, let me piggyback.” Nope. Once that calendar year’s over, I’m like mentally, “Nope, I need that dividing line.”

Tyler Emrick:

Well, and you start thinking about extension payments for the prior year, contributions for the prior year, and we have some pretty fancy Excel spreadsheets to kind of try to keep it as clean as possible for the individuals and families that are kind of working under that because, hey, it adds complexity, but you think about the tax benefits of something like that. I mean, it’s just tremendous.

Walter Storholt:

I’m sure one day I’ll turn that corner, I’ll turn that corner.

Tyler Emrick:

We’ll keep working on it for sure. And then the other thing I had on here is really just kind of looking through, making sure that all your tax documents are coming in appropriately. They’re good. A lot of times these 1099s might be issued multiple times throughout the year, just making sure that you get the appropriate one. A lot of times that first issue of your 1099 for your taxable brokerage account might have some adjustments or might not be the finalized one. So certainly being mindful of that is important. For those individuals that are getting return of excess contributions to their retirement plans for the prior year, a lot of those checks come around this timeframe. So depending on the employer that you work with, there might be rules on how much you can put into your retirement plan through your employer. And those rules might not be known or the limits might not be known until the whole year gets done.

So your employer might be going back in running some of those tests and saying, “Hey, we didn’t pass plan testing. You need to get a check for X amount.” So be on the lookout for any of those checks that might come into play. You certainly then can use that to adjust and think about your 2026 contributions. Along those same lines, we talk about after tax contributions quite a bit to 401k accounts, right? Walt, this is where, hey, you’ve contributed to the max, maybe pre-tax or Roth to your employer plan. There’s this third group that you can contribute to most 401k plans called after-tax. You can contribute too much there and get a check back. So if you’re getting some of these return of excess contribution checks from your employers, it’s a good time to kind of take inventory of that, make any adjustments for the upcoming year to kind of limit those checks.

Likewise, for your after tax contributions to your 401k, double checking, making sure that they got converted to a Roth throughout the year. And if they’re not getting converted, making sure that’s done. So that goes back to that whole retirement plan, just maintenance, blocking and tackling, just making sure that you’re using them in the right way and all this minutia and granular details, all that stuff kind of gets done. Right, Walt?

Walter Storholt:

Yeah.

Tyler Emrick:

I mean, you’re getting the tax documents, they’re going to tell you that it’s good to kind of go through and look for those things. And I’m sure your tax preparer is looking at that and giving you some of those pointers, but if you’re preparing your own taxes, obviously you want to be looking through some of these things and adjusting for the upcoming year.

Walter Storholt:

If nothing else, just an accuracy check, Tyler. I once had a 1099 that wasn’t correct. And I was going to end up paying a bunch of extra tax dollars on money that I didn’t actually earn. So luckily got that fixed. But yeah, that’s no fun to go through. So make sure you’re triple checking that things are actually correct. Step one for me is just one of those important things. So no, this is great, Tyler. Good stuff.

Tyler Emrick:

Absolutely. Yeah, no, I mean, so just kind of build it together. I mean, it’s a good time to take inventory. Obviously we’ve done quite a bit of recordings and podcasts on just beginning year checklist items and changes and adjustments. I think this is just kind of an extension of it. Just taking an inventory of what those tax documents look like, checking them for errors, just doing a quick sanity check to make sure that any adjustments don’t need to be made. And then there are a handful of those items that can truly still impact your taxes. Most of it is involved around your retirement plans, HSAs, certainly business owners and some self-employed individuals probably have a little bit more flexibility, but there are still a few things that we can do here, even though the 2025 year has been booked to potentially impact what your tax liability is going to be.

So just making sure you’re looking at those and getting them done if they need to be.

Walter Storholt:

Don’t be scared to look back and do something for the prior year if there’s an opportunity there. Good lesson to learn on the show today, along with all the other details. Good stuff, Tyler.

If you have questions about taxes, your financial plan, whether it’s looking back at 2025, 2026, or even ahead to ’27, or a combination of all of those, right? That’s the best way to do it, look at everything in concert with one another. Talk with Tyler and the team at True Wealth Design. Click the link in the description of today’s show or go to truewealthdesign.com. Click the Let’s Talk button and you can schedule a 20-minute discovery call with an experienced advisor on the team to go through your financial plan, talk about some of your goals, and see if you’re a good fit to work with one another and where all of these areas of improvement might be popping up in your own individual plan. So again, click that link in the description or go to truewealthdesign.com to set that up. It doesn’t matter where you are, you can meet remotely from wherever you are for your convenience.

Tyler, thank you so much for the help today. Appreciate it, and we’ll talk again soon.

Tyler Emrick:

Yep, absolutely.

Walter Storholt:

New episodes every week. Come back and join us next time right back here on Retire Smarter.

Speaker 4:

Information provided is for informational purposes only and does not constitute investment tax or legal advice. Information is obtained from sources that are deemed to be reliable, but their accurateness and completeness cannot be guaranteed. All performance reference is historical and not an indication of future results. Benchmark indices are hypothetical and do not include any investment fees.