Why October, Not December
Most of what's worth doing before year-end takes lead time. Equipment has to be ordered, delivered, and actually installed, not just paid for. A retirement account has to be opened, and some types need to exist by December 31 even if funding can follow. An entity election has its own filing deadline, tied to when your business was formed. Starting in October gives you roughly ten weeks to work through this. Starting in December gives you two, and by then, several of these options are already off the table.
Equipment and Capital Purchases
For 2026, the Section 179 deduction limit is $2,560,000, with the deduction phasing out dollar for dollar once total qualifying purchases exceed $4,090,000, and fully phased out at $6,650,000. Bonus depreciation currently sits at 100% for qualifying property. For most restaurant-scale equipment purchases, this means the full cost can potentially be deducted in the year the equipment goes into service, not spread out over several years.
An invoice dated in December for equipment that doesn't show up and get installed until January doesn't qualify for this year. If new kitchen equipment, POS hardware, or dining room buildout is on your radar for early next year anyway, it's worth finding out from your CPA whether moving the timeline up makes sense for this year's return.
Section 179 also has a business-income limitation that bonus depreciation doesn't, and the two interact in ways that depend on your specific numbers. This is squarely a conversation for your accountant, not a DIY calculation.
Retirement Contributions: What Actually Needs to Happen by Year-End
Retirement accounts split into two categories this time of year, and mixing them up costs people options.
A Solo 401(k) generally needs to be established, the plan itself set up, by December 31 to make certain contributions for this tax year, even though some funding can follow into the next year. If you don't already have one and want to use it for this year, the setup itself is the part that can't wait.
A SEP IRA works differently. It can typically be opened and funded as late as your tax filing deadline, including extensions, which for many sole proprietors means well into the following October. If you're not sure yet how much you'll want to contribute, a SEP gives you more room to decide later.
For 2026, the combined SEP and Solo 401(k) contribution ceiling is $72,000 (before catch-up contributions), the Solo 401(k) employee deferral limit is $24,500, and the catch-up contribution for those 50 and older is $8,000, rising to $11,250 for those age 60 to 63. Which vehicle actually makes sense depends on your entity structure, your income, and whether you have employees, so this is worth a specific conversation with your accountant rather than a generic pick.
Vehicle and Mileage Records
2026 had a mid-year change to the IRS standard mileage rate: 72.5 cents per mile for business driving from January 1 through June 30, and 76 cents per mile from July 1 through December 31. If you're tracking vehicle deductions with the standard mileage rate, it's worth confirming your log actually splits the year at the correct rate rather than applying one flat number to the whole year.
Year-end is also a good moment to check whether a mileage log exists at all. It's one of the more commonly under-documented deductions, and it's much easier to reconstruct a partial year in October than a full year in January.
Entity Structure: Is This Still the Right Setup?
If your income or growth stage has changed meaningfully this year, whether that's opening a second location, hiring more managers, or simply growing revenue, it's worth revisiting whether your current entity structure (sole proprietorship, LLC, S-corp) still fits. An S-corp election, if you're considering one, generally needs to be filed well before year-end to apply to the current tax year, and it carries its own specific deadline rules tied to when your business was formed. This isn't a decision to make from a blog post. It's a reason to get on your CPA's calendar before their busiest season starts.
Getting Your Books Actually Ready for Your CPA
None of the moves above matter much if the books handed to your CPA in the spring are a mess. Reconciled bank accounts, sales tax collected that actually matches what's been reported, labor and tips categorized correctly, and any cleanup items from earlier in the year actually resolved rather than still sitting there, all of this determines whether your CPA spends their time with you planning or reconstructing what happened. Messy books at tax time usually mean more billable hours spent figuring out the past and less time available for anyone to help you plan ahead.
What Needs to Happen by December 31, and What Can Wait
| Action | Deadline | Why the Timing Matters |
|---|---|---|
| Equipment purchases (Section 179 / bonus depreciation) | Placed in service by December 31 | Ordering isn't enough; it has to be installed and usable |
| Solo 401(k) setup | Plan established by December 31 | The plan has to exist by year-end even if some funding can follow |
| SEP IRA contributions | Can typically wait until your extended filing deadline | One of the few moves that doesn't require action before year-end |
| Traditional or Roth IRA contributions | Can typically wait until the April filing deadline | Also doesn't require year-end action |
| S-corp election, if considering one | Generally needs to be filed well before year-end | Has its own deadline rules tied to your entity's formation date; confirm with your CPA |
| Mileage log review | By December 31, covering the full year | 2026 has two different rates depending on when the miles were driven |
| Books reconciled and cleaned up | Before handing off to your CPA | Determines whether tax season is planning or reconstruction |
Frequently Asked Questions
What tax moves should a restaurant owner make before year-end?
The main ones worth reviewing are equipment purchases under Section 179 or bonus depreciation, retirement account setup, your mileage log, your entity structure, and whether your books are clean enough to actually support planning conversations with your CPA.
Do I have to spend money before December 31 to get a tax deduction?
Not always. Some moves, like a SEP IRA contribution, can happen after year-end, up to your extended filing deadline. Others, like placing new equipment in service, have to happen by December 31. Which category applies depends on the specific deduction, so confirm with your CPA before assuming either way.
Can I still open a retirement account this late in the year?
It depends on the type. A Solo 401(k) generally needs to be established by December 31 even if some funding can follow, while a SEP IRA can typically be opened and funded as late as your extended filing deadline. Confirm which applies to your specific situation with your accountant.
What happens if I wait until December to start planning?
Most of these moves need lead time: equipment ordered and installed, an account opened, an election filed. Waiting until December often means the window to actually execute has closed, even if you already know what you'd want to do.
Should I change my business's tax entity structure before year-end?
It's worth reviewing if your income or growth stage has changed, but entity elections carry their own deadlines and consequences that depend on your specific business. This is a conversation for your CPA, not a decision to make from a general guide.
October gives you roughly ten weeks of runway to actually act on your year-end tax picture instead of just finding out what it looks like in April. The Food Bookkeeper handles both the bookkeeping and the tax side, so instead of handing off messy books to a separate CPA in the spring, we can get your numbers clean and work through what's worth doing before December 31 in the same conversation. Let's talk about what applies to your specific situation — book a discovery call.
