How Business Owners Can Coordinate Tax Planning With Their CPA

The Short AnswerMost business owners meet their CPA to file a return, when the year's tax is already decided. Planning works on the year that is still open: how the owner is paid, which retirement plans the business sponsors, when income and deductions land, and what happens at a sale. The owners who pay the least tax over time usually hold one planning meeting with their CPA before the fourth quarter, arrive with the right questions, and keep every specialist working from the same numbers.

A Return Records The Year. Planning Shapes It.

By the time a CPA prepares the return, the year’s tax is mostly settled. The salary was paid, the plan contributions were made or missed, the equipment was bought or not, and the sale closed when it closed. A good CPA will still find everything the law allows. What the return cannot do is go back and change the decisions it is recording.

That is why the most useful conversation with a CPA usually happens in the summer or early fall, with three or four months of the year still open. It is a different meeting from tax preparation, and many owners never ask for it.

The Levers That Belong In That Meeting

How You Pay Yourself

For owners of pass-through businesses, the split between salary, distributions and retirement contributions affects payroll taxes, the qualified business income deduction and how much can go into qualified plans. The QBI deduction, generally up to 20% of qualified business income, is now a permanent part of the tax code, but it has income-based limits and special rules for service businesses such as medical and professional practices. The right compensation mix is a CPA calculation that should be rerun as income changes.

The Retirement Plans The Business Sponsors

Qualified plans are the largest deduction many owners have. For 2026, an employee can defer up to $24,500 into a 401(k), plus an $8,000 catch-up from age 50, and total contributions to a defined contribution plan can reach $72,000. A cash balance plan, which is a type of defined benefit plan, can sit on top of a 401(k) and allow far larger deductible contributions for older, higher-paid owners, because it targets a benefit that can reach $290,000 a year in 2026. An actuary sets the contribution each year, and the plan has to cover eligible employees, so the design is a joint project between the owner, the CPA, a third-party administrator and the strategist.

The plan also creates a future bill. Everything contributed is taxed as ordinary income when it comes out, which is the subject of The Second Bill. A plan designed only for the deduction, with no view on the exit, is half a plan.

CalculatorSee how the exit changes the tax on a plan balance→

State And Local Tax Elections

For 2026 the federal deduction for state and local taxes is capped at $40,400 ($20,200 if married filing separately), and the cap shrinks once modified adjusted gross income passes $505,000, down to a floor of $10,000. For many high-earning owners that makes entity-level state tax elections worth reviewing with the CPA every year. California’s elective pass-through entity tax, for example, is available for tax years beginning before 2031.

Timing

When income is recognized and when deductions are taken can move tax between years and between brackets. Year-end purchases, bonus timing and the timing of a large receivable are ordinary planning questions. The top federal rate of 37% begins at $768,700 of taxable income for a married couple filing jointly in 2026, so a year that would otherwise spill well past that line is worth modelling before December.

The Exit

A sale is often the single largest tax event of an owner’s life, and the structure is set early: asset or stock sale, allocation of the price, installment terms, what happens to the retirement plan, and whether proceeds are positioned for the estate. These decisions are hard to change once a letter of intent is signed.

A Simple Calendar

Where A Strategist Fits

A CPA’s core job is accurate compliance: the return, the filings, the elections. Many CPAs also plan, and the best ones plan hard. What they often lack is time during tax season, and specialists for the pieces that sit outside the return, such as qualified plan design, advanced life insurance and estate coordination.

That is the space Tyler works in. He designs the strategy and the insurance pieces, brings them to the owner’s CPA for review, and works with the plan administrator and attorney to implement. The CPA keeps the return, signs off first, and nothing is filed or funded until they have. For owners, the practical benefit is one plan, reviewed by every professional involved, instead of separate advice from each.

About The Author

Tyler Ostrovsky founded 19th Hole Financial after eight years as a professional golfer, including status on PGA Tour Canada. He builds tax strategy and advanced life insurance plans for high earners and works alongside their CPAs and attorneys.