Waiting until December to think about year-end tax planning means most of your best moves are already off the table. Equipment has to be purchased and placed in service, retirement plans have to be set up, and books have to be clean before December 31, and none of that happens in the last 2 weeks of the year. Idaho Falls business owners who start in September have 4 full months to make decisions instead of 4 panicked days.
Poston Denney & Killpack, PLLC has been guiding Idaho Falls business owners through exactly this kind of strategic tax planning since 1984, and BBB accredits the firm with an A+ rating. Here's what to actually do with the months you have left in 2026.
Why September Beats December For Tax Planning
Here's the math nobody spells out: your third quarter estimated tax payment is due September 15. That means by mid-September, you already have 3 quarters of real numbers, not guesses. You know roughly what the business made, what it's going to make, and how much tax you're on track to owe.
December gives you almost nothing extra. The calendar year ends in 2 weeks, most vendors and equipment dealers are backed up with other people's year-end purchases, and any retirement plan that has to be established (not just funded) by December 31 is already a scramble.
September planning means:
- Equipment purchases can be ordered, delivered, and placed in service before December 31, not rushed
- A new retirement plan can actually get set up in time to matter for 2026
- Your bookkeeping has time to get cleaned up so your CPA is working from real numbers, not estimates
- You have room to talk through decisions instead of making them under deadline pressure
The Idaho Bonus Depreciation Trap Most Business Owners Don't Know About
A lot of business owners believe that federal tax law now gives every business 100% bonus depreciation on equipment purchases. That's not the full picture in Idaho.
Under the One Big Beautiful Bill Act (OBBBA), Congress made 100% first-year bonus depreciation permanent for qualified property placed in service after January 19, 2025. That's real, and it applies on your federal return. But Idaho has decoupled from federal bonus depreciation rules since 2009, and Governor Little's signing of House Bill 559 in February 2026 did not change that. According to the Idaho State Tax Commission, Idaho still doesn't conform to bonus depreciation under IRC Section 168(k).
What this means in practice: if you buy a piece of equipment and take 100% bonus depreciation on your federal return, you'll need to add that deduction back on your Idaho return and instead depreciate the asset over its normal schedule for state tax purposes. Skip this step and you'll either underpay Idaho tax or get a notice asking why your state and federal depreciation don't match.
This is exactly the kind of detail that gets missed when business owners rely on national tax content instead of a CPA firm that knows Idaho law inside and out. Bruce Denney, CPA, CVA, has more than 20 years of public accounting and tax experience navigating these state-versus-federal gaps for local business owners.
What You Can Still Do With Section 179 In 2026
Here's the good news: Idaho does conform to Section 179, so this deduction works the same on your state and federal returns.
For tax years beginning in 2026, the Section 179 expensing limit is $2,560,000, with the phase-out threshold starting at $4,090,000, per IRS Revenue Procedure 2025-32. That's a substantial jump from where the limit sat before OBBBA raised it, and it's now a permanent, inflation-indexed part of the tax code rather than something that could get pulled back.
For most small and mid-sized Idaho Falls businesses, that ceiling is high enough that Section 179 covers the equipment, software, and qualifying improvements you'd realistically purchase in a year. Since Idaho recognizes Section 179 in full, this is often the more useful deduction to plan around locally, rather than counting on bonus depreciation to carry the state-side benefit. Kevin Killpack, CPA, works with Idaho Falls business owners on exactly this kind of business tax and advisory planning to make sure equipment purchases land in the right tax year.
Retirement Contributions: The Move With The Best Payoff
Retirement contributions are one of the few year-end moves that reduce your tax bill and build your own financial future at the same time.
For 2026, the IRS increased the 401(k) employee elective deferral limit to $24,500, up from $23,500 in 2025, with an additional $8,000 catch-up contribution available if you're 50 or older. Traditional and Roth IRA limits also increased, to $7,500 for 2026.
The timing matters here. A SEP-IRA can be opened and funded up until your tax filing deadline (including extensions), which gives you flexibility into 2027 for the 2026 tax year. A new 401(k) plan is a different story: it generally has to be established by December 31 to count for the current tax year, even if you fund it later. If you've been thinking about starting a retirement plan for yourself or your employees, September is the time to have that conversation, not December.
A September-To-December Tax Planning Checklist
- Review 9 months of actual financial data. Pull your profit and loss for the year so far and project where you'll land by December 31.
- Decide on equipment or software purchases. If you need it anyway, buying and placing it in service before year-end lets you use Section 179 on your Idaho return.
- Evaluate retirement plan options. If you want a new 401(k) in place for 2026, start the paperwork now. SEP-IRAs have more flexibility but still benefit from early planning.
- Reconcile your books. Clean, current bookkeeping is what lets your CPA give you real numbers instead of estimates when you sit down to plan. If your books aren't current, QuickBooks setup and support is worth tackling before your planning meeting, not after.
- Confirm your entity structure still makes sense. If you're an LLC wondering whether an S-corp election would save on self-employment tax, year-end is the natural checkpoint to run the numbers.
- Schedule a planning meeting with your CPA before Thanksgiving. Waiting until December means competing for time with everyone else who waited too.
Idaho-Specific Numbers To Know For 2026
- Idaho flat income tax rate: 5.3% for both individuals and corporations, effective for tax years beginning on or after January 1, 2025
- Idaho conforms to: Section 179 expensing, the federal standard deduction (as of House Bill 559), and most individual OBBBA provisions
- Idaho does not conform to: Section 168(k) bonus depreciation, or Section 168(n) qualified production property expensing
- Q4 2025 estimated tax deadline: January 15, 2026 (for reference on last year's cycle)
- Q3 2026 estimated tax deadline: September 15, 2026
Frequently Asked Questions
When should Idaho Falls business owners start year-end tax planning?
September is the ideal starting point. By mid-September, your third quarter estimated tax payment has already forced you to look at real year-to-date numbers, and you still have 3 and a half months to act on equipment purchases, retirement plan setup, and bookkeeping cleanup before December 31.
Does Idaho follow the federal 100% bonus depreciation rule?
No. While the One Big Beautiful Bill Act made 100% bonus depreciation permanent at the federal level for property placed in service after January 19, 2025, Idaho has decoupled from Section 168(k) bonus depreciation since 2009 and continues to do so under House Bill 559. Idaho business owners need to add back federal bonus depreciation and depreciate the asset separately on their Idaho return.
What is the Section 179 deduction limit for 2026?
For tax years beginning in 2026, the Section 179 expensing limit is $2,560,000, with the phase-out threshold beginning at $4,090,000, according to IRS Revenue Procedure 2025-32. Unlike bonus depreciation, Idaho fully conforms to Section 179, so this deduction applies the same way on both your federal and state returns.
What is Idaho's income tax rate for 2026?
Idaho has a flat income tax rate of 5.3% for both individual and corporate taxpayers, effective for tax years beginning on or after January 1, 2025.
How much can I contribute to a 401(k) or IRA before year-end 2026?
The 2026 401(k) employee elective deferral limit is $24,500, with an additional $8,000 catch-up contribution available for those 50 and older. Traditional and Roth IRA limits increased to $7,500 for 2026. A new 401(k) plan generally needs to be established by December 31 to count for the current tax year, so this decision benefits from early planning.
What's the difference between tax preparation and tax planning?
Tax preparation is filing an accurate return based on what already happened. Tax planning is making decisions before year-end, like equipment purchases, retirement contributions, and entity structure, that change what your return will show. Preparation looks backward; planning looks forward, and it only works if there's still time left in the year to act.
When is the deadline to set up a new retirement plan for 2026?
A new 401(k) plan generally must be established by December 31, 2026 to count for the 2026 tax year, even if you fund it later. A SEP-IRA is more flexible and can typically be opened and funded up until your tax filing deadline, including extensions.
Ready To Plan Instead Of Scramble?
Poston Denney & Killpack, PLLC has been helping Idaho Falls business owners navigate tax season since 1984, and the firm holds an A+ rating with the Better Business Bureau. Bruce Denney, CPA, CVA, and Kevin Killpack, CPA, bring decades of combined experience to strategic tax planning and preparation, not just filing a return. If you want to start your 2026 planning while there's still time to act on it, call (208) 522-0886 to schedule your year-end planning conversation.
