Year-End Tax Planning Starts in September, Not December

There is a version of year-end tax planning that happens in the third week of December, consists of buying a truck, and does roughly nothing. The useful version happens now, and it is mostly a matter of knowing which levers still have time on them.

What follows is the 2026 landscape — the figures, the deadlines, and the one large state change that makes this year different in South Carolina. Everything here is for tax year 2026 specifically. These numbers are indexed and legislated; carrying one into next year is how a correct article becomes a wrong one.

South Carolina changed, and it changed a lot

Start here, because it is the item most likely to be missed. Governor McMaster signed H. 4216 into law on March 30, 2026, effective for the 2026 tax year, with returns due April 15, 2027. It does four things that matter to almost every South Carolina filer:

• Two-tier rates: 1.99% on income below $30,000, and 5.21% on income of $30,000 and above, minus $966.
• Decoupling: South Carolina no longer follows the federal standard and itemized deductions, and federal adjusted gross income is now the starting point for the state return.
• A new South Carolina Income Adjusted Deduction replaces the federal standard deduction — $15,000 single or married filing separately, $22,500 head of household, $30,000 married filing jointly or surviving spouse — and these may be reduced based on income.
• The state Earned Income Tax Credit is limited to $200.
• Future top-rate reductions are tied to a Board of Economic Advisors revenue projection, determined by February 15 each year.

The practical consequence for planning is that the relationship between a federal move and its South Carolina effect is not what it was last year. Anything that changes federal adjusted gross income now flows into South Carolina differently, and anything that worked through itemized deductions may not reach the state return at all. The SCDOR has said it will publish further guidance later in the year; until it does, this is a year to model the state number rather than assume it.

The retirement decisions, in deadline order

This is where September earns its place, because the three main small-business plans have three different deadlines and one of them has already passed.

Equipment, and the trap inside it

For tax years beginning in 2026, Section 179 lets you expense up to $2,560,000, reduced dollar for dollar once qualifying purchases exceed $4,090,000. Sport utility vehicles are separately capped at $32,000 under Section 179. Separately, 100% bonus depreciation is now permanent for qualified property acquired after January 19, 2025, under the One, Big, Beautiful Bill.

Two things about that are worth knowing before you spend anything.

• Section 179 cannot create a loss — it is limited to taxable income from the trade or business. Bonus depreciation can create a loss. Which one you elect is a real decision, not a formality.
• South Carolina does not recognize federal bonus depreciation. The federal deduction is added back on the state return, your South Carolina basis in the asset ends up higher than your federal basis, and the difference comes back as extra state depreciation in later years. A 100% federal write-off is not a 100% South Carolina write-off, and it never has been.
• The test is placed in service, not ordered, not paid for. Equipment sitting on a loading dock on December 31 has not been placed in service.

And the point that no article about December spending makes often enough: a deduction returns your marginal rate, not the purchase price. If you did not need the asset, you have converted a dollar into somewhere between twenty and forty cents of tax saving and a depreciating object.

The individual figures for 2026

• Standard deduction: $32,200 married filing jointly, $16,100 single or married filing separately, $24,150 head of household.
• State and local tax deduction cap: $40,400 ($20,200 married filing separately), reduced above $505,000 of modified adjusted gross income ($252,500 married filing separately) but never below $10,000 ($5,000).
• Health savings account contributions: $4,400 self-only, $8,750 family, for a qualifying high deductible health plan.
• Annual gift tax exclusion: $19,000 per recipient, unchanged from 2025.
• Estate basic exclusion amount: $15,000,000.
• Qualified business income deduction threshold: $403,500 married filing jointly, $201,750 for other returns, above which the wage and property limits and the specified service trade rules start to bite.

The One, Big, Beautiful Bill also created deductions for qualified tips (up to $25,000), qualified overtime (up to $12,500, or $25,000 for joint filers), passenger vehicle loan interest (up to $10,000) and an additional $6,000 deduction for those 65 and over. Each is available whether or not you itemize, and each phases out by income. If any of those describe your household, they are worth checking rather than assuming — and worth remembering that South Carolina's decoupling means a federal deduction of this kind does not automatically reach your state return.

What September is actually for

The list above is long, but the September work is short. It is three questions.