You Had a Big Year. That's the Problem.
The worst tax bills we see don't come from bad years. They come from good ones.
Somebody sells a building they've owned for eighteen years. Somebody finally settles the insurance claim from the fire. Somebody has the quarter they've been working toward since they opened. Somebody sells a piece of the business to a partner. It's the best thing that's happened to them in a decade, and then the following April it turns into the worst conversation of the year.
Not because they did anything wrong. Because nobody told them, while it was happening, that it was also a tax event.
The things that do this
If any of these happened to you in 2026 — or are going to happen before December — this article is about you:
You sold real estate, equipment, or a vehicle the business owned
You sold all or part of the business, or bought out a partner
You settled a lawsuit or received an insurance payout
You had an unusually strong year or one enormous job
You took a large distribution out of the company
A debt was forgiven, settled, or written off
You pulled money out of a retirement account, or converted one
You had significant investment or crypto gains
Your spouse changed jobs, took a big raise, or started drawing a pension
You sold or refinanced personal property in a way that put cash in your hands
Why these hurt worse than an ordinary bill
The money is usually gone. That's the first reason. A normal profitable year builds the tax bill and the cash to pay it at roughly the same pace. A one-time event doesn't work that way. The proceeds paid off a note, or went into the next building, or covered two years of deferred maintenance, or got distributed to the owners. By April there's a bill for money that has already done its job somewhere else.
It moves everything else with it. A large one-year spike doesn't just get taxed on its own. It can push the rest of your income into higher territory, change what deductions and credits you qualify for, and affect things that seem unrelated — Medicare premiums, financial aid, and the size of the estimated payments you'll be required to make the following year.
And it usually brings a penalty with it. Estimated payments are meant to track your income through the year. A big event in June with no corresponding payment in June means you were underpaid for months, and there's a cost attached to that even after you pay the tax in full.
Why September is a very different conversation than March
This is the category where fall planning does the most good, because there is genuinely a lot that can still be done — and almost none of it can be done after December 31.
Depending on the situation, that can mean structuring how and when proceeds are received, spreading a sale across more than one year, pairing the gain against losses or timing-sensitive deductions, adjusting the remaining estimated payments so the penalty stops accruing, or funding a retirement plan in the year you actually have the cash to fund it. Which of those apply to you depends entirely on the details, and some of them depend on decisions that have to be made before the deal closes rather than after.
That's the real point. The single most valuable thing you can do is tell your accountant before it happens.
If it already happened
Then we're doing damage control instead of planning, and damage control in September still beats damage control in April by a wide margin. There is usually something — an adjusted payment to stop the bleeding, a plan contribution, a decision about the fourth quarter that softens it. And even where there's nothing to change, knowing the number now means you have five months to arrange the cash instead of five days.
We would much rather tell you bad news in September than in April. In September it's a problem. In April it's an emergency.
What this is really about
You worked a long time for the year you just had. Selling the building, landing the job, buying out the partner that was supposed to be the payoff. The thing we want for our clients is that the payoff still feels like a payoff twelve months later, instead of turning into a spring where you're moving money around and wondering whether you should have done the deal at all.
It's the difference between celebrating something and flinching at it.
What it takes to get started
If something on that list above happened this year, bring us the paperwork for it and the closing statement, the settlement documents, the 1099, the loan payoff, whatever exists. Along with your profit and loss through August, your balance sheet, and last year's return. If the event hasn't happened yet and you're in the middle of negotiating it, call before you sign anything.
Who we are
Business Advisory Services LLC brings twenty-plus years of accounting, bookkeeping, payroll, tax preparation, tax resolution, and business advisory work for small business owners, out of our Middleton and Eau Claire offices. A good share of what we do is exactly this, being the phone call somebody makes before a deal instead of after one.
Make the call before you sign
608-831-4900, ext. 801. Or call us on our cell phone at 608-347-3010. If something big happened this year, or is about to, let's talk about it while there's still room to move.
Next week: why buying a truck in December doesn't automatically save you money.
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