5 Tax Planning Opportunities High-Income Business Owners Should Evaluate in 2026

Key Takeaways

• Recent tax law changes have created new planning opportunities for high-income business owners. 
• Pass-through entity elections and QSBS planning may provide significant tax savings when evaluated early. 
• Proactive, year-round planning can help business owners retain more earnings and support long-term growth. 

For high-income business owners, profitability is not just about increasing revenue. It’s also about preserving more of the business’s earnings. As tax laws evolve, owners have an opportunity to revisit their planning strategies and determine whether they are positioned to take advantage of available benefits. 

The most successful business owners don’t treat taxes as a year-end exercise. Instead, they view tax planning as an ongoing part of managing cash flow, building wealth, and supporting future growth. Here are five tax planning opportunities worth evaluating. 

1. Evaluate the SALT Cap Workaround 

Recent legislation permanently extended the state and local tax deduction limitation while temporarily increasing the cap through 2029. However, income-based phaseouts mean many high-income taxpayers may still see limited benefit from the higher cap. 

Owners of pass-through entities, such as partnerships, S corporations, and certain LLCs, may be able to reduce the impact of these limitations through entity-level tax elections. 

Potential advantages include: 

• Reducing the pass-through income reported by owners 
• Creating deduction opportunities beyond the individual SALT limitation
• Taking advantage of state-specific entity-level tax provisions 

Because rules vary significantly by state, business owners should review eligibility requirements and consider how the election may affect all owners before moving forward. 

2. Review QSBS Eligibility Before a Future Exit 

Qualified Small Business Stock, or QSBS, remains one of the most valuable tax benefits available to eligible business owners. Recent legislative changes increased the potential exclusion to $15 million or 10 times the cost basis for qualifying shares acquired after July 4, 2025. New holding period rules may also allow partial exclusions after three or four years of ownership. 

Business owners considering a future sale should evaluate whether their company and ownership structure meet the requirements for QSBS treatment. Waiting until a transaction is imminent may limit available planning opportunities. Additional strategies such as trust stacking and Section 1045 rollovers may further enhance QSBS benefits for qualifying owners, making early planning particularly important. 

3. Explore Available Tax Credits and Deductions 

Many business owners overlook incentives that could reduce their overall tax burden. Depending on the nature of the business and its activities, opportunities may include: 

• Research and development tax credits
• Qualified Business Income deductions
• Section 179 expensing
• Bonus depreciation strategies

While not every incentive applies to every business, these provisions can create meaningful tax savings when incorporated into a broader planning strategy. Regular discussions with your advisory team can help ensure valuable opportunities are not overlooked. 

4. Evaluate Real Estate and Investment Related Strategies 

While the new rules create additional complexity, they also create opportunities for more strategic charitable planning.

Qualifying cash contributions remain deductible up to 60% of AGI, which may provide greater flexibility than certain non-cash gifts. Non-cash contributions and gifts of appreciated property may be subject to lower AGI limitation thresholds depending on the type of organization receiving the gift.

Business owners may also benefit from multi-year giving strategies. Coordinating larger donations during higher income years may help offset the impact of deduction phaseouts and improve overall tax efficiency.

5. Make Tax Planning a Year-Round Process 

Many business owners focus on taxes only when returns are due. Unfortunately, that approach can result in missed opportunities. Effective tax planning occurs throughout the year and should be integrated into broader business decision-making. Entity structure changes, compensation decisions, major purchases, and succession planning can all have meaningful tax implications. 

The most successful business owners view tax planning as an ongoing process rather than an annual event. By evaluating opportunities throughout the year and coordinating with advisors before major decisions are made, owners are often better positioned to preserve cash flow, improve profitability, and support long-term wealth building.

Building a Tax Strategy That Supports Long-Term Growth 

Now is the time to evaluate whether existing tax strategies remain aligned with current laws and long-term objectives. Opportunities such as SALT cap workarounds, QSBS planning, and available tax incentives may yield meaningful savings, but many require careful planning and execution. 

The most effective tax plans are proactive, coordinated, and aligned with broader business goals. Rather than treating taxes as a year-end obligation, successful owners view tax planning as an ongoing strategy that supports profitability, cash flow, and wealth accumulation. 

Consult with your CPA to determine which opportunities may apply to your situation and how they can support your broader business and financial goals. 

Tim Streeter, CPA

I help business owners find success with straight talk and advocacy.

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