Mid-Year Tax Planning Strategies: What Individuals and Business Owners Should Do Now

Mid-Year Tax Planning Strategies

Tax season is over. If you’re like most people, you’re mentally checking out of anything tax-related until next year. 

That’s a mistake.

Whether you’re a W2 employee, business owner, or are dipping your toes into the side gig space, mid-year is the ideal time to:

• Review your upcoming obligations

• Examine expected cash flows

• Make adjustments or corrections to avoid compliance issues

In this blog, we’re breaking down the mid-year tax strategies individuals and business owners should make to get ahead of next year’s tax season.

For Individuals: 4 Mid-Year Moves to Make Now

1. Check Your Withholding

The One Big Beautiful Bill Act (OBBBA) put several new changes into place in 2026 that carry in 2026. There’s a chance that your withholdings won’t line up with what your payroll department withholds and what the new law allows. 

To be safe, use the IRS Tax Withholding Estimator to check your position and make adjustments with your employer.

2. Don’t Miss Quarterly Deadlines

The chaos of annual tax returns can sometimes make you forget about upcoming deadlines for quarterly tax returns.

If you’re required to pay taxes quarterly, don’t forget to make your payments by June 15th (and the subsequent September 15th and January 15th dates). If you miss that deadline, you’ll trigger an underpayment penalty that compounds until you pay. 

Wondering if you need to pay? See if your situation requires quarterly estimated tax returns. Planning your mid-year tax return strategy now can save you future headaches.

3. Take Advantage of Higher Deductions

The SALT deduction limit increases from $10,000 to $40,000 in 2026 and will continue to rise 1% each year through 2029.

For homeowners in states with high property taxes, like New York, and on Long Island in particular, it’s smart to get ahead of property tax payments and state income tax withholding now, rather than at year’s end.

4. Consider a Mid-Year Roth Conversion

Expecting to earn a lower income this year due to a career change, business loss, or market shifts? Partial Roth conversions can reduce future required minimum distributions and smooth Medicare phase-out cliffs to take some pressure off you.

While every taxpayer can explore those tax strategies, there are a few more that can make a big difference for business owners.

For Business Owners: 4 Tax Strategies to Make Before Q3

These four moves aren't complicated, but they do require attention before the year accelerates into Q4 and options start to narrow.

1. Review Your Entity Structures

Your business structure needs to evolve as your income, ownership roles, and activities change.

A mid-year tax review ensures your entity still has the right balance of liability protection, tax efficiency, and state-level advantages. For example, forming an S-Corp can allow for significant savings for owners drawing a salary and distributions in NY, NJ, and CT.

2. Maximize the QBI Deduction

The Qualified Business Income (QBI) deduction, which lets pass-through entities deduct 20% of your business income, is now permanent. 

If you have at least $1,000 in QBI, you can now deduct the new minimum of $400. Mid-year is the perfect time to confirm your income and structure qualification.

3. Plan Equipment Purchase Wisely

Section 179 deductions have increased in 2026, allowing you to deduct up to $2.56 million of qualified purchases. If you’re planning on making capital purchases or placing your assets in service, do so before December 31st.

4. Set Aside the Correct Amount for Taxes

To avoid a surprise come next tax season, you should be setting aside a specific amount of revenue in a dedicated tax account. 

Depending on your net income, it’s wise to reserve 25-35% to account for local, state, and federal taxes that impact business owners who operate on Long Island and in New York State.

Ready to Review Your Tax Position?

The most effective strategy is one that allows for consistent, ongoing planning year-round.

At AVM DeMars, our Long Island-based tax advocacy team works with people across Long Island and all areas of New York to optimize tax planning, find deductions, and plan for current and future tax opportunities.

Let’s put you in the best position for tax season. Schedule a consultation with us today!