It's the middle of March, and Vernon is meeting with his accountant about taxes. His company has had its best year with nearly $500,000 in profits, and everything has been running smoothly like clockwork. He doesn't have anything to worry about…or so he thinks.

Vernon's heart stops when his accountant tells him his tax bill. "$200,000?" He says, eyes wide. "How is it possible I owe that much? Where am I going to get the money?"

The April Surprise (Not) OR The April Surprise That Wasn't Actually a Surprise

Perhaps you know an HVAC business owner who's been in Vernon's situation, or maybe you yourself have had this experience. This "surprise" isn't actually a surprise, however. Yes, the tax bill arrives in April, but the decisions that caused it happened in October the year before.

Where the Real Decisions Get Made: October

In her video 2026 Tax Planning Blueprint for Business Owners, Mia Anne Pham Reeves says that "The Tax Code isn't a storm you endure; it's a playbook you can win with." If decisions are made by the correct criteria and at the correct time, business owners like Vernon can save tens of thousands of dollars that stays in their pockets. Making decisions in October would allow Vernon to make them proactively instead of reactively.

The Three Levers You Already Missed (Or Didn't)

There are three levers that move a tax bill, the first being the timing of income/expenses. In another one of her videos, Mia Anne Pham Reeves shares that when business owners pay themselves the wrong way, it can cost them thousands of dollars a year. Vernon only pays himself when he remembers to. His business is an LLC, and single-member LLCs are automatically taxed as sole proprietors. This means that all profit his business earns is subject to regular income taxes and the 15.3% self-employment tax. As his business grows, he'll need to discuss the tax implications of this growth with a tax professional.

Another business lever is equipment purchases. The timing of when vehicles and other materials are bought can be the differentiating factor of buying a vehicle now or waiting until next year. Every piece of equipment is given a lifespan, and each item's original purchase price is split into even sections and expensed for each year of their lifespans. For example, Vernon bought a $50,000 truck, and his accountant gave it a 5-year lifespan. This means he can only claim $10,000/yr on his taxes. However, under Section 179 or bonus depreciation, Vernon can claim the entire $50,000 on his taxes for this year. This will save him a few thousand dollars in taxes. One caveat to consider, however, is that this only works if the vehicle is in use. If Vernon had only put a deposit down and had payments, he wouldn't have been able to claim the entire purchase on his taxes.

The third and final business lever is future planning. Many owners like Vernon believe that they will be able to retire by selling their business and living off the proceeds. Sadly, this approach can cost owners hundreds of thousands of dollars in tax liability. A good tax strategist and retirement planner can often mitigate a significant portion of the tax liability by setting money aside in retirement plans like SEP IRAs or Solo 401ks, and allowing it to grow tax deferred. Most retirement plans have a tax deductible component that can significantly lower a business's taxable income.

Now that Vernon's aware of this, he researches reputable tax strategists in his area so he can start funding his retirement.

What "Backwards" Tax Planning Actually Costs You

As mentioned above, Vernon didn't have any tax conversations with his accountant until mid-March. That's when he found out his company owes $200,000 in taxes. At this point, it's too late for Vernon to do anything to lower that bill.

"Backwards" tax planning cost Vernon more than just money that could've been kept in his pocket. It also cost him some of his wellbeing. He spent many days at work feeling a combination of shock and defeat. And at night, he didn't sleep very well due to stressing and worrying about the future. He'd wonder if it would always be this way and if there was anything he could've done to prevent this.

Flipping the Calendar: A Q3/Q4 Checklist

Here's a list of things to do in Q3 or Q4 to beat tax season panic:

  • Ensure all vehicle and equipment purchases are documented
  • Schedule an appointment with your accountant. In this appointment, address the following:
    • Estimated tax bill
    • Ways to lower it
    • Business entity structure

Bringing It All Together

Remember Vernon's situation described in the introduction to this blog post? Well, let's fast forward a few months. It's a beautiful day in October of the same year, and Vernon's currently on his way to his accountant's office. He's breathing in the fresh air and taking in the beautiful foliage all around him as he walks carrying a briefcase with documents listing the vehicle and equipment purchases made that year so far, and a written list of questions and concerns he'd like to discuss with his accountant.

About an hour and a half later, Vernon is leaving his accountant's office. He had a very thorough, productive conversation with the accountant. All of his questions were answered, his concerns were addressed, he's made some decisions, and he has a few more to think about and make within the next week.

Call to Action

Pull last year's tax bill. Write down one Q4 decision that either helped or hurt that number.

If you need additional assistance, book a complimentary consultation with Joseph.

Disclaimer: The information in this post is intended for general guidance purposes. For advice specific to your business finances or taxes, consult a licensed accountant or financial advisor.