Tax planning is the work of reviewing your numbers while there is still time to change the outcome. A tax return reports what already happened. Planning looks at the current year, estimates the tax, and tests the decisions that are still open: how much to pay in, when to take income, whether to buy equipment now, how to pay yourself from your company, or what a planned sale will cost. Our tax planning service is for individuals, families, business owners, investors and professionals in Naperville, Aurora and Chicagoland, and for clients in every state who work with us remotely.
What a planning engagement covers
The work depends on who you are, but most engagements touch some mix of these areas:
- A current-year projection. Year-to-date income, withholding and estimated payments are used to forecast the 2026 return, so a balance due is a known number rather than a surprise.
- Withholding and estimated payments. Adjusting a Form W-4 or setting quarterly payments so you pay about the right amount at about the right time.
- Owner pay and entity fit. For an S corporation owner, the salary and distribution mix; for any owner, whether the current entity still suits the business.
- Timing. Whether income or deductions are better recognized this year or next, including bonuses, invoices, equipment purchases and retirement plan contributions.
- Investments and property. Capital gains, rental property activity, and the tax effect of a planned sale before you sign.
- Equity compensation. Stock option exercises, vesting of restricted stock units and early-stage company shares.
- Moves and residency changes. A new state, a move abroad, or a first year in the U.S. can change which return you file.
What changed for 2025 and 2026
Several rules that affect planning are new. This table covers the main ones, with the tax year each applies to.
| Item | Rule | Years |
|---|---|---|
| Standard deduction | Joint $31,500, single $15,750, head of household $23,625 (2025); joint $32,200, single $16,100, head of household $24,150 (2026) | 2025 and 2026 |
| State and local tax deduction | Limit of $40,000 ($20,000 if married filing separately), reduced when income is above $500,000 ($250,000 married filing separately), but not below $10,000 ($5,000) | 2025 |
| Tips | Deduction up to $25,000, phasing out above $150,000 of modified adjusted gross income ($300,000 joint) | 2025 through 2028 |
| Overtime | Deduction for the premium portion, up to $12,500 ($25,000 joint), same phase-out | 2025 through 2028 |
| Age 65 and older | Additional $6,000 per eligible person, phasing out above $75,000 ($150,000 joint) | 2025 through 2028 |
| Car loan interest | Up to $10,000 for qualifying U.S.-assembled vehicles, phasing out above $100,000 ($200,000 joint) | 2025 through 2028 |
| Charitable gifts without itemizing | Up to $1,000 ($2,000 joint) | 2026 |
| Business equipment | 100% first-year depreciation for qualified property acquired after January 19, 2025; Section 179 limit of $2,500,000, reduced once purchases pass $4,000,000 | 2025 |
| Qualified business income deduction | Continues for tax years beginning after 2025, with a minimum deduction for certain active businesses | 2026 |
Each item has eligibility tests and paperwork. The tips and overtime deductions, for example, apply only to certain kinds of pay. Whether one matters to you is a personal question, which is what a projection answers. See our guide to the new deductions for tips, overtime and seniors for the rules in more detail.
How an engagement works
- Consultation. We talk through your income sources, goals and open decisions, such as a sale, a job change, a new business or a move.
- Written engagement agreement. Before any work begins, we send an agreement that sets out the scope, what we will deliver, what we need from you and how fees are determined.
- Document collection. Usually the last two returns, year-to-date pay records or business financials, brokerage and equity statements, and anything changing, such as a purchase contract.
- Projection and options. We build the projection, then model two or three realistic choices side by side.
- Review and delivery. We walk through the results and put the recommended steps and dates in writing.
- Follow-up. We check in at estimated tax dates and before year-end, and update the projection if your facts change.
Problems planning is meant to catch
- Under-withholding on side income or bonuses. Employers withhold federal tax on supplemental wages at a flat 22% for 2026, or 37% on the part above $1 million paid in the year, and that can be less than your actual rate.
- First-year self-employment. Many new freelancers and owners learn about estimated payments from a penalty notice. See estimated taxes.
- A salary that has no documented basis. S corporation owners need payroll that can be explained. Our guide on reasonable compensation covers the idea.
- A large gain with no plan. Selling a business, real estate or concentrated stock is easier to handle before the contract is signed.
- An entity chosen at formation that no longer fits. Growth, new partners or a move to another state can change the right answer.
How we can help
We prepare the projection, explain the options in plain English, and carry the decisions through to the return. Because we also prepare individual and business returns, the plan and the filing use the same numbers. Where the plan involves several states or countries, we coordinate with our multi-state and international tax work. We meet clients in person in Naperville and Aurora and work by video and secure document exchange with clients everywhere. To start, use our contact page.
Frequently asked questions
When should I start tax planning?
Earlier than you expect. Planning for 2026 is most useful in the fall, when most of the year is known and there is still time to act, but a mid-year review catches more. The next fixed date is the January 15, 2027 estimated payment.
Is tax planning only for high earners?
No. Households with a rental, a side business, equity pay, a move or a new baby often have more open decisions than a high earner with a single W-2. The value depends on how many choices you actually have.
Can you promise how much I will save?
No. Savings depend on your facts and on the law at the time, and no responsible professional can guarantee a result. What we can do is show you the estimated effect of each option before you decide.
Official sources
- IRS: Working Families Tax Cuts for individuals and workers
- IRS: Instructions for Schedule A (Form 1040)
- IRS: Qualified business income deduction
- IRS: Publication 946, How to Depreciate Property
- IRS: Publication 509, Tax Calendars
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.