Year-End Tax Planning Checklist for Foreign Business Owners: 2026 Edition

Tax planning done in April is documentation. Tax planning done in October and November is strategy.

The difference between the two is measured in dollars — sometimes tens of thousands of dollars. Retirement account elections, equipment purchase timing, income deferral, entity structure changes, and foreign compliance catch-ups all have hard December 31 deadlines. Once the calendar flips, those options are gone permanently.

For foreign business owners managing both a US business and financial ties to India, Singapore, Germany, or anywhere else — the planning list is longer. You are not just managing US business deductions and entity structure. You are also managing FBAR account valuations, Form 5471 CFC analysis, foreign tax credit optimization, and India-US DTAA positions — all of which are affected by decisions made before December 31.

This checklist walks through every category in sequence, with specific dollar amounts, 2026-specific rule changes under the One Big Beautiful Bill Act (OBBBA), and the foreign compliance layer that most year-end planning guides skip entirely.

Quick Answer: Why is 2026 year-end planning especially important? The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, made several provisions permanent for the first time — including the 20% QBI deduction, 100% bonus depreciation, and a SALT cap increase to $40,000. For foreign business owners, an additional layer of compliance — FBAR, Form 5471, Form 8938 — has year-end measurement dates that require simultaneous attention. The strategies that save $10,000 to $50,000+ annually require decisions before December 31. Once January arrives, most options are permanently gone.

60-second summary before you read on:

• The December 31 deadline is hard — entity elections, retirement plan establishment, equipment purchases, income timing, and many deductions all expire at year-end
• Key OBBBA changes for 2026: permanent 20% QBI deduction, 100% bonus depreciation restored, Section 179 limit at $2.56 million, SALT cap raised to $40,000, new tip and overtime deductions
• Retirement contributions: Solo 401(k) employee deferral elections must be made by December 31 — contribution funding can follow by tax filing deadline
• Foreign compliance layer: FBAR, Form 5471, and Form 8938 are annual obligations — year-end is when accounts are valued, making Q4 the right time to review all foreign asset positions
• S-Corp salary must be reviewed before December 31 — adjusting reasonable compensation mid-year is straightforward; correcting it retroactively after year-end is expensive
• The SALT deduction cap increased to $40,000 in 2026 — Pass-Through Entity (PTE) elections can unlock additional SALT deductions for S-Corp and partnership owners in many states
• Business owners who plan in Q4 typically identify $5,000 to $50,000+ in additional savings compared to waiting until tax time

Why 2026 Year-End Planning Is Especially Important

The One Big Beautiful Bill Act, signed into law on July 4, 2025, made permanent several provisions that were previously temporary — and introduced new ones. For the first time in years, business owners can plan with certainty: the QBI deduction is permanent, bonus depreciation is restored to 100%, and the SALT cap increase to $40,000 provides new deduction room. The window to capture some of these benefits — particularly the SALT prepayment strategy and equipment purchase timing — closes December 31.

Key OBBBA changes affecting your 2026 year-end planning:

• Permanent 20% QBI deduction for pass-through owners under Section 199A
• 100% bonus depreciation restored for qualifying property placed in service after January 19, 2025
• Section 179 expensing limit raised to $2.5 million with a $4 million phase-out threshold
• SALT deduction cap raised from $10,000 to $40,000 (with income-based phase-down above $500,000 for joint filers / $250,000 for single filers; reverts to $10,000 in 2030)
• New deduction for qualified tip income — up to $25,000, effective 2025–2028
• New deduction for qualified overtime pay — up to $12,500 individual / $25,000 joint, effective 2025–2028
• Form 1099-NEC reporting threshold increased to $2,000 for 2026 payments (up from $600)
• Social Security wage base increased to $184,500 for 2026

Entity Structure Review

The last quarter of the year is the only window to make entity structure changes that take effect for the following tax year — and for some elections, you can still affect the current year.

S-Corp election for 2027: If you are currently operating as a sole proprietor or disregarded LLC and your net income consistently exceeds $80,000–$100,000, the S-Corp election is worth modeling now. The Form 2553 deadline for an S-Corp election effective January 1, 2027 is March 15, 2027 — but planning and entity setup must begin in Q4 2026. LLC formation, EIN acquisition, payroll system setup, and bank account opening all take time. Start the process in November or December.

S-Corp reasonable salary review: If you already operate an S-Corp, December is when you confirm your year-to-date W-2 salary is appropriate for the full year. An underpaid salary is the primary S-Corp audit trigger. An overpaid salary reduces distributions eligible for the QBI deduction. Both directions carry costs — calibrate now, not in March.

Multi-entity coordination: If you have multiple businesses, Q4 is the time to analyze how income and deductions are allocated across entities. Income that can be shifted to a lower-bracket entity, expenses that can be accelerated in a higher-bracket entity, and intercompany transactions that should be formally documented all require attention while the year is still open.

Pass-Through Entity (PTE) tax elections: In many states, a PTE election converts individual SALT that is otherwise capped into a fully deductible entity-level tax. For S-Corp and LLC owners in California, New York, New Jersey, Illinois, and most other high-income-tax states, a PTE election can unlock thousands of additional deductions above the individual $40,000 SALT cap. State-specific deadlines vary — review your state’s requirements now for 2027 planning.

Year-end checklist — Entity Structure: ☐ Run S-Corp conversion analysis if net income exceeds $80,000 ☐ Confirm S-Corp reasonable salary is appropriate for the full year ☐ Review multi-entity income and deduction allocation ☐ Evaluate PTE election for 2026 or 2027 ☐ Confirm all entities are in good standing with state filings

Accelerate Deductions Before December 31

Deduction timing is the most accessible lever in year-end tax planning. Expenses incurred by December 31 are deductible in 2026. Expenses paid in January are deductible in 2027. For taxpayers expecting higher income in 2026 than 2027, pulling deductions forward reduces this year’s tax bill.

Prepay deductible business expenses: Business expenses payable in Q1 2027 that can be prepaid in December 2026 include software subscriptions and annual SaaS licenses renewing in January, professional memberships and dues, business insurance premiums covering periods into 2027, professional development courses beginning in early 2027, and office supplies and materials needed in Q1.

Equipment and technology purchases — Section 179 and bonus depreciation: Section 179 expensing has been increased to $2.5 million with a $4 million phase-out threshold. The OBBBA restores 100% bonus depreciation for qualifying property placed in service after January 19, 2025. Equipment, computers, vehicles, and software placed in service by December 31, 2026 qualify for full first-year expensing. Ordered but not received equipment does not qualify for 2026 deductions — confirm delivery and placement-in-service dates before year-end.

The de minimis safe harbor: Under the Tangible Property Regulations, the de minimis safe harbor election allows immediate expensing of certain small-dollar tangible property purchases — $5,000 per item for businesses with an applicable financial statement, $2,500 per item for those without. Items under these thresholds can be expensed immediately rather than capitalized.

SALT prepayment: The SALT deduction cap increased to $40,000 under the OBBBA. Consider prepaying Q4 estimated state taxes before December 31 — this counts toward the current year’s SALT deduction. For foreign business owners in high-tax states like California and New York, this can mean an additional $10,000–$30,000 in deductible state taxes if not already at the $40,000 cap.

Charitable contributions: Beginning January 1, 2026, charitable donations must exceed 0.5% of adjusted gross income to qualify for an itemized deduction. Donations to donor-advised funds (DAFs) before December 31 allow you to take the deduction in 2026 while distributing grants over multiple years. For business owners near the itemize/standard deduction threshold, bunching charitable contributions into one year is more effective than spreading them.

Year-end checklist — Accelerate Deductions: ☐ Prepay January 2027 business expenses where practical ☐ Order and place in service qualifying equipment before December 31 ☐ Confirm delivery dates for equipment purchases in transit ☐ Prepay Q4 state estimated taxes before December 31 (SALT strategy) ☐ Review de minimis safe harbor election for small purchases ☐ Make charitable contributions or fund a donor-advised fund before December 31

Income Timing — Defer Where Possible

The flip side of accelerating deductions is deferring income. Revenue received in December is taxable in 2026. Revenue received in January is taxable in 2027. For cash-basis taxpayers — which includes most small businesses and sole proprietors — the timing of when you receive payment determines when you owe tax.

When income deferral makes sense: If your 2027 income is expected to be lower than 2026 — due to a planned sabbatical, major deduction, or business restructuring — deferring income is especially valuable.

Strategies for deferring income:

• Delay sending December invoices for services not yet rendered until late December, so payment arrives in January 2027
• For large project completions scheduled in late December, negotiate milestone payments that fall in January
• If your business receives advances or retainers, structure delivery of services to fall into 2027 where possible
• Consider installment sales for business asset disposals planned in Q4 — spreading gain recognition across multiple years under IRC Section 453

When deferring income is NOT the right strategy:

• If your 2027 income is expected to be significantly higher, accelerating income into 2026 at lower rates may be preferable
• If you are close to the QBI phase-in threshold, income deferral can keep you in the full deduction zone
• If you are on the edge of the 110% safe harbor rule for estimated taxes, income acceleration may create underpayment penalties

Year-end checklist — Income Timing: ☐ Review December invoices — can any be delayed until January without business impact? ☐ Assess whether 2027 income will be higher or lower than 2026 ☐ Review installment sale options for planned asset disposals ☐ Confirm accounting method — cash vs. accrual affects what you can and cannot defer

Maximize Retirement Contributions

Retirement contributions are the most powerful deduction available to self-employed business owners — and several have hard December 31 deadlines that cannot be extended.

Solo 401(k) — the December 31 hard deadline:

Two separate deadlines apply:

• Plan establishment: Must exist by December 31, 2026 to receive any 2026 contributions. A plan opened January 2, 2027 cannot receive 2026 contributions — this deadline cannot be extended
• Employee deferral election: Must be made in writing by December 31, 2026. Actual funding can follow by your tax filing deadline
• Employer profit-sharing contribution: Can be funded up to April 15, 2027 (or October 15, 2027 with extension)

2026 Solo 401(k) limits:

Defined Benefit / Cash Balance Plans: These plans allow contributions of $265,000+ for 2026 but require actuarial setup in October or November. For business owners aged 50+ with high income and no full-time employees, a Cash Balance Plan combined with a Solo 401(k) can allow $150,000–$300,000+ in annual deductible contributions. Actuarial setup takes 6–8 weeks — December 31 is the hard cutoff. If this is of interest, contact MyTaxFiler immediately.

SEP-IRA: Contributions can be made until your tax filing deadline including extensions — October 15, 2027 for calendar-year businesses that file an extension. No year-end election is required. The SEP-IRA contribution is capped at 25% of compensation — consistently producing lower total contributions than a Solo 401(k) at most income levels.

HSA contributions: If enrolled in a qualifying High Deductible Health Plan (HDHP), the 2026 limits are $4,300 for self-only coverage and $8,550 for family coverage. HSA contributions reduce AGI dollar for dollar and carry triple tax advantages — deductible going in, grows tax-free, tax-free on qualified medical withdrawals. Contributions can be made up to April 15, 2027.

Year-end checklist — Retirement: ☐ Confirm Solo 401(k) plan exists — or establish immediately if not ☐ Make employee deferral election in writing before December 31 ☐ Calculate maximum employer profit-sharing contribution (fund by April 15, 2027) ☐ Evaluate Cash Balance or Defined Benefit Plan if income exceeds $200,000 — requires immediate action ☐ Maximize HSA contribution if on an HDHP ☐ Confirm SEP-IRA contribution amount (can wait until filing deadline)

QBI Deduction Optimization

The 20% Qualified Business Income deduction is now permanent under the OBBBA — and year-end is the time to ensure you are positioned to claim the maximum amount.

How the QBI deduction phases out in 2026: The QBI deduction phases out above $201,775 for single filers and $403,550 for joint filers. Actions that reduce your taxable income below these thresholds — retirement contributions, deduction acceleration, Solo 401(k) contributions — can preserve or increase the full deduction.

Key QBI optimization moves before December 31:

• Maximize Solo 401(k) or retirement contributions — each dollar contributed reduces taxable income and keeps you in the full deduction zone
• For S-Corp owners: Review the split between W-2 salary and distributions. Salary is excluded from QBI — distributions qualify. Reducing salary (within reasonable compensation bounds) increases QBI-eligible income
• New for 2026: The $400 minimum QBI deduction applies if your QBI is $1,000 or more — you are guaranteed at least $400 in QBI deduction regardless of income level
• SSTB owners near the threshold: Consider whether income deferral or deduction acceleration can keep you below $201,775 single / $403,550 joint — below the threshold, SSTB restrictions do not apply

Year-end checklist — QBI: ☐ Project full-year taxable income — are you above or below the QBI phase-in threshold? ☐ Model retirement contribution impact on QBI deduction ☐ Review S-Corp salary vs. distribution split for QBI optimization ☐ Confirm IT consulting, engineering, or non-SSTB classification applies to your business

Payroll and Employee Compensation Review

Social Security wage base — 2026 update: The Social Security wage base for 2026 is $184,500. Once an employee’s wages reach $184,500, the 6.2% employer Social Security tax stops — a meaningful cash flow change for businesses with high-earning staff in Q4.

Year-end bonuses — timing decision: Bonuses paid before December 31, 2026 are deductible in 2026 and taxable to employees in 2026. Bonuses paid in January 2027 are deductible in 2027 and taxable to employees in 2027. For accrual-basis businesses, bonuses accrued by year-end and paid within 2.5 months (by March 15, 2027) are deductible in 2026 under the economic performance rules.

New for 2026 — tip and overtime deductions: The OBBBA introduced new deductions for qualified tip income (up to $25,000) and qualified overtime pay (up to $12,500 individual / $25,000 joint), effective 2025–2028. Businesses in hospitality, food service, and industries with significant overtime should update payroll systems to track these separately — the deduction is claimed by employees on their personal returns, but proper employer documentation is required.

1099 reporting threshold update: The Form 1099-NEC reporting threshold increased to $2,000 for 2026 payments. If you pay contractors, update your tracking systems accordingly. Collecting W-9 information remains best practice regardless of threshold.

Year-end checklist — Payroll: ☐ Confirm S-Corp reasonable salary is appropriate and documented ☐ Decide on year-end bonus timing — December vs. January ☐ Review payroll system for 2026 tip and overtime deduction tracking ☐ Update contractor payment tracking to reflect new $2,000 1099-NEC threshold ☐ Confirm all W-9s are on file for contractors paid in 2026 ☐ Review employee benefit elections — FSA, HSA, and retirement plan changes for 2027

Foreign Compliance — The Layer Most Business Guides Skip

For foreign business owners, year-end planning has an additional dimension that purely domestic guides never address: the annual foreign account and entity reporting obligations that use December 31 account valuations and must be filed with your 2026 tax return.

FBAR account valuation review:

The FBAR requires reporting the maximum balance in each foreign account at any point during the year — not the December 31 balance. December is when you should:

• Confirm all foreign accounts are inventoried — personal, business, and signature authority accounts
• Determine whether aggregate balances exceeded $10,000 at any point in 2026
• Document maximum balances by account — pull monthly statements to find the highest point in the year
• Note any accounts opened or closed during 2026 — closed accounts are still reportable if they exceeded the threshold before closure

The FBAR for 2026 calendar year accounts is due April 15, 2027, with an automatic extension to October 15, 2027 — no form required.

Form 8938 FATCA threshold check:

As of December 31, assess whether your total specified foreign financial assets — bank accounts, fixed deposits, foreign stock held directly, foreign partnership interests, foreign entity ownership — exceed the applicable Form 8938 threshold. For US-based single filers: $50,000 at year-end or $75,000 at any point. For joint filers: $100,000 at year-end or $150,000 at any point.

Form 5471 — CFC year-end review:

If you own 10% or more of a foreign corporation, Form 5471 is due with your 2026 tax return. December is when you should:

• Confirm the foreign corporation’s fiscal year end and obtain financial statements
• Assess Subpart F income and GILTI inclusion — distributions received before December 31 affect these calculations
• Review whether any US persons acquired or disposed of ownership — triggering Category 3 filing requirements
• Confirm all related-party transactions for Schedule M documentation

Foreign tax credit planning:

Taxes paid or accrued to foreign governments generate credits on Form 1116 that reduce your US tax dollar for dollar. Year-end is the time to:

• Confirm Indian TDS amounts paid on NRO interest and dividends
• Review whether electing the accrual method for foreign tax credits produces a better result than the cash method in 2026
• Check whether unused foreign tax credits from prior years (carryforwards) can be utilized against 2026 US tax

India-US DTAA year-end positions:

If you receive Indian salary, business income, rental income, or dividends that are also taxable in the US, confirm:

• TDS certificates (Form 16A) are being collected from Indian payers — you will need these amounts to claim the foreign tax credit
• Rental income from Indian property is being reported on US Schedule E
• NRE account interest is being tracked — it is taxable in the US regardless of Indian tax exemption
• Form 5472 obligations are reviewed for any foreign-owned US LLCs

This is the layer of year-end planning where MyTaxFiler adds the most value — coordinating all of these international positions simultaneously rather than addressing each form in isolation at filing time.

Year-end checklist — Foreign Compliance: ☐ Inventory all foreign accounts — personal, corporate, and signature authority ☐ Gather maximum balance records for FBAR — pull monthly statements ☐ Assess Form 8938 threshold — tally all specified foreign financial assets as of December 31 ☐ Obtain foreign corporation financial statements for Form 5471 ☐ Confirm Subpart F income and GILTI calculation inputs ☐ Collect TDS certificates and Indian tax payment documentation for Form 1116 ☐ Confirm NRE/NRO interest amounts — reportable on US Schedule B ☐ Review Form 5472 obligations for foreign-owned US LLCs

R&D Credit and Other Business Credits

Business tax credits reduce your tax bill dollar for dollar — they are more valuable than deductions of the same size.

R&D tax credit: If your business developed new software features, improved manufacturing processes, built proprietary algorithms, or conducted qualifying research activities during 2026, the Section 41 R&D credit may apply. The credit is worth 6%–20% of qualifying expenses. For qualified small businesses, up to $500,000 can be applied against payroll taxes.

Time-sensitive R&D item — July 6, 2026 retroactive window: Small businesses with $31 million or less in average annual gross receipts can retroactively deduct unamortized R&D costs capitalized in 2022–2024 via amended returns. The deadline to file an election for retroactive application was July 6, 2026. If your business capitalized R&D costs in any of those years and has not yet amended, contact a CPA immediately to assess whether any relief options remain.

Other credits to review before year-end:

• Work Opportunity Tax Credit (WOTC): Hiring qualifying employees from targeted groups generates credits of $2,400–$9,600 per employee. The employee must begin work before December 31 and the employer must submit Form 8850 within 28 days of the start date
• Small Business Health Care Tax Credit: Available to businesses with fewer than 25 full-time equivalent employees, average wages below ~$62,000, covering at least 50% of employee health insurance premiums through a SHOP marketplace plan
• Energy-Efficient Commercial Building Deduction (Section 179D): For qualifying energy efficiency improvements to commercial property — deduction of up to $5.81 per square foot in 2026

Year-end checklist — Credits: ☐ Document all qualifying R&D activities and expenses for 2026 ☐ Confirm R&D payroll tax offset election if applicable ☐ Review WOTC eligibility for new hires in 2026 — confirm Form 8850 was submitted ☐ Assess Section 179D deduction for energy efficiency improvements

Bookkeeping and Documentation Cleanup

Clean books are not just an accounting preference — they are a tax requirement. Deductions without documentation are deductions at risk.

December bookkeeping priorities:

• Reconcile all business bank accounts and credit cards through November — clear any unreconciled items older than 60 days
• Categorize all uncategorized transactions — every “uncategorized expense” is a potential deduction that has not been claimed
• Confirm owner distributions and draws are recorded correctly as equity transactions, not expenses
• Reconcile payroll totals to payroll reports — mismatches between accounting software and payroll provider are common and costly at filing time
• Collect receipts for all expenses over $75

Vehicle mileage log: The standard mileage rate for business use is 72.5 cents per mile for 2026. If you have been tracking mileage throughout the year, December is when you close out the log and total business miles. If your mileage log has gaps, reconstruct it now using calendar appointments, Google Maps history, or expense reports — a reconstructed log is less defensible than a contemporaneous one, but significantly better than no log at all.

Year-end checklist — Bookkeeping: ☐ Reconcile all accounts through November ☐ Categorize all uncategorized transactions ☐ Confirm owner draws vs. salary are properly recorded ☐ Collect and organize all receipts over $75 ☐ Close out vehicle mileage log for the year ☐ Document home office square footage and 2026 housing expenses

The Master Year-End Deadline Calendar

The 8 Most Common Year-End Tax Planning Mistakes Foreign Business Owners Make

1. Starting in December instead of October. October is the ideal starting point — giving you 8–10 weeks to identify strategies, make decisions, and execute before December 31. Starting in December limits your options and forces rushed decisions. By December, some retirement plan options have already closed.
2. Missing the Solo 401(k) establishment deadline. A plan that does not exist on December 31 cannot receive 2026 contributions — no matter how much you earn or how large the potential deduction. This is the single most costly missed deadline in self-employed tax planning.
3. Ignoring the foreign compliance layer entirely. Most year-end planning guides focus exclusively on domestic deductions. For foreign business owners, FBAR maximum account valuations, Form 5471 year-end CFC measurements, and GILTI calculations are all determined as of December 31 — missing these creates penalties that dwarf any domestic deduction you optimized. Coordinate with an international tax specialist before year-end, not at filing time.
4. Not reviewing S-Corp reasonable salary before December 31. An underpaid salary is the primary S-Corp audit trigger. An overpaid salary needlessly reduces QBI. Correcting it retroactively after December 31 requires payroll amendments — expensive and conspicuous.
5. Ordering equipment but not placing it in service. Section 179 and bonus depreciation require property to be placed in service by December 31 — not just ordered or paid for. Equipment sitting in a warehouse on December 31 does not qualify for 2026 expensing regardless of when it was purchased.
6. Not taking the SALT prepayment opportunity. The SALT cap increased to $40,000 under the OBBBA. Foreign business owners in California, New York, New Jersey, and other high-tax states who are not at the $40,000 cap can accelerate state tax deductions by prepaying Q4 estimates before December 31.
7. Skipping the QBI threshold analysis. Every dollar of additional retirement contribution below the QBI phase-out threshold ($201,775 single / $403,550 joint) potentially preserves 20% of that dollar back as a QBI deduction. Running this calculation in Q4 — while you can still make contributions — is worth several hours of a specialist’s time.
8. Doing year-end planning alone without cross-border coordination. For foreign business owners, domestic tax planning and international compliance are not separate exercises. A decision to distribute profits from your Indian company before December 31 affects both your GILTI calculation and your foreign tax credit position. These need to be modeled together — not handled by separate advisors who do not talk to each other.

Key Takeaways

• The OBBBA made several provisions permanent in 2026 — the 20% QBI deduction, 100% bonus depreciation, and a $40,000 SALT cap — creating planning opportunities that reward Q4 action
• December 31 is the hard deadline for Solo 401(k) establishment, employee deferral elections, equipment placed in service, S-Corp salary adjustments, income timing, and SALT prepayment — January is too late for all of these
• For foreign business owners: FBAR maximum account values, Form 5471 CFC measurements, and GILTI calculations are all determined based on the year — Q4 is the time to review all international positions
• The QBI deduction phases out above $201,775 single / $403,550 joint — retirement contributions and deduction acceleration made before December 31 can preserve or increase the full 20% deduction
• Business owners aged 50+ with high income should evaluate Cash Balance or Defined Benefit Plans immediately — actuarial setup takes 6–8 weeks and the December 31 deadline cannot be extended
• FATCA data-sharing means the IRS is receiving your foreign account balances automatically — year-end is the right time to confirm all FBAR and Form 8938 obligations are being met
• Planning in October and November produces results; planning in April produces paperwork

Frequently Asked Questions

What is the most important year-end tax deadline for self-employed business owners in 2026? The Solo 401(k) plan establishment deadline — December 31, 2026. A plan that does not exist by December 31 cannot receive any 2026 contributions, regardless of income. This is the single most commonly missed and most costly deadline in self-employed tax planning. If you do not have a Solo 401(k) and your net self-employment income exceeds $50,000, establishing one before December 31 should be your first call.

How does the OBBBA SALT cap change affect foreign business owners? The SALT cap increase to $40,000 (from $10,000) under the OBBBA is most valuable to business owners in high-tax states like California, New York, New Jersey, and Illinois. Prepaying Q4 state estimated taxes before December 31 captures the 2026 deduction. For pass-through entity owners, a PTE election at the entity level can unlock additional SALT deductions above the individual cap — check your state’s election deadline.

Does year-end planning matter if I already pay taxes in India? Yes — significantly. Taxes paid in India generate Foreign Tax Credits on Form 1116 that reduce your US tax dollar for dollar. But the timing of when those taxes are paid or accrued, whether you elect cash or accrual method for foreign credits, and whether you have unused carryforwards from prior years all require analysis before December 31. Additionally, distributions from your Indian company, GILTI inclusions, and Subpart F calculations are all affected by decisions made before year-end.

Can I still set up a retirement plan in December and deduct contributions for 2026? Yes — if you act before December 31. A Solo 401(k) established by December 31, 2026 can receive the employee deferral portion before year-end, and the employer profit-sharing contribution can be funded as late as October 15, 2027 with an extension. If your income exceeds $200,000 and you want to explore a Cash Balance Plan for 2026, contact a specialist immediately — the actuarial setup takes 6–8 weeks.

What foreign compliance items have a December 31 measurement date? Several. FBAR requires reporting the maximum account balance at any point during the year — so your year-end review should pull monthly statements, not just the December 31 balance. Form 8938 uses the December 31 fair market value of your specified foreign financial assets to determine whether the threshold is met. Form 5471 GILTI and Subpart F calculations are based on the foreign corporation’s full-year income. Distributions taken from your foreign company before December 31 can reduce GILTI inclusions in some structures — this requires specialist analysis.

What is the QBI deduction and how do I make sure I qualify for the full 20%? The Qualified Business Income deduction allows pass-through owners — sole proprietors, S-Corp shareholders, and partnership members — to deduct 20% of their qualified business income from taxable income. The deduction is now permanent under the OBBBA. It phases out above $201,775 for single filers and $403,550 for joint filers in 2026. The primary lever for preserving the full deduction is reducing taxable income through retirement contributions before December 31 — every dollar contributed to a Solo 401(k) or defined benefit plan reduces taxable income and keeps more of your QBI deduction intact.

At MyTaxFiler, we specialize in cross-border tax for Indians in the US — from FBAR and FATCA to property in India, equity in your home-country startup, and everything in between. We’re not a software tool. We’re a team of CPAs and tax specialists who’ve seen your exact situation before. Talk to us at MyTaxFiler.com