Most year-end checklists are a list of chores with no explanation of why the date matters. The date matters because of one rule, and once you have that rule the rest of the list arranges itself — including one item that turns out to be the opposite of what you are usually told.
The rule the whole month hangs on
Almost every self-employed person is on the cash method, which means income counts in the year you receive it and expenses count in the year you pay them. Not when you invoiced. Not when the work was done.
Receiving is broader than banking, and this is the part people get wrong. A check that arrives in your mailbox on December 29 is this year’s income whether or not you deposit it, because it was available to you. Leaving it in a drawer until January does not move it. The rule is about when the money was yours to take, not when you took it.
Which is why chasing invoices in December is not tax advice
You will read collect your outstanding invoices before December 31 on every year-end list there is. It is good advice about cash flow and it is bad advice about tax, and the lists rarely say which one they are giving.
Every invoice you successfully chase into December is income you are taxed on this year rather than next. If you are having a strong year and next year looks quieter, being paid in January is the better outcome, and a client who pays slowly has done you a small favor.
None of which is a reason to let money sit unclaimed. Getting paid beats a timing advantage almost every time, and an invoice you stop chasing in December is one you are much less likely to collect at all. Just make the decision knowing which lever you are pulling.
What genuinely has to happen before December 31
Three of these are hard deadlines. The rest of the usual list is not.
Equipment: in service, not ordered
If you have been putting off a purchase the business actually needs, the end of the year is a real deadline. For 2026 the special depreciation allowance is 100% for qualifying property, and Section 179 expensing is available well beyond any ceiling a one-person business will reach — $2,560,000, with a separate $32,000 cap on sport utility vehicles.
The word that catches people is placed in service. The equipment has to be bought and actually in use by December 31. Ordering a machine on December 30 that arrives on January 6 is a next-year deduction, whatever the invoice date says.
The honest caveat, which we have made before and will keep making: spending money to reduce tax is still spending money. A write-off returns your marginal rate, not the purchase price. Buy the thing if you need the thing.
Reconcile the mileage log — and split it at July
2026 is an unusual year for this. The IRS changed the business standard mileage rate mid-year: 72.5¢ a mile from January 1 to June 30, and 76¢ a mile from July 1 to December 31. A single annual total multiplied by one rate is wrong whichever rate you pick.
So the year-end job is not just totaling the log, it is splitting it at July 1 and running two calculations. Do it now rather than in April, because this is the record you cannot reconstruct later. A missing receipt can be found in a bank statement. A trip you took in March cannot be remembered in April.
Retirement, if you are going to
A Solo 401(k) has to exist before the year ends. Funding it can come later; establishing it cannot. If you have had a good year and were thinking about one, December is the last month that decision is available.
A SEP-IRA is the more forgiving option here — it can be opened and funded right up to your filing deadline, extensions included. Miss December and it is the only door still open, which is worth knowing before you panic about the other one.
Collect the W-9s you should have collected in March
1099-NEC forms are due January 31, and you cannot file one without the recipient’s taxpayer ID. December is your last comfortable chance to chase anyone whose details you are missing.
The threshold changed this year: for payments made in 2026 it is $2,000, up from the $600 that had stood since 1954. That means a shorter list than you are used to — but also that a fair amount of published advice on this is currently out of date.
Two housekeeping jobs worth the hour
Categorize the year while you can still remember it. Twelve months of transactions in April is archaeology. The same twelve months in December is recall.
Write down the number you actually made. Not revenue — profit, after expenses. It is the figure that drives next year’s estimated payments, your safe harbor, and any honest conversation about rates. Most people carry a vague sense of it and are surprised in both directions.
And the thing that is not urgent
The fourth estimated payment is due January 15, not December 31. If money is tight in the last week of December, that is the item with slack in it. It still has to be paid, and the safe harbor still protects you if you have covered last year’s total tax across the four dates — but it is not a December problem.
Where this stops
These are federal rules for a sole proprietor on the cash method, which describes most self-employed people and not all of them. If you are on the accrual method, run an entity, have employees, or are considering a large or unusual purchase to change this year’s number, the arithmetic here is not enough and December is a good month to have that conversation with an accountant rather than a bad one to skip it.
BrassWell keeps the running record these jobs depend on — what came in, what went out, what has been set aside — so December is a review rather than a reconstruction. It does not file your return.
Questions, answered
Should I chase unpaid invoices before December 31?
For cash flow, yes. For tax, understand what it does: on the cash method, an invoice collected in December is income taxed this year rather than next. If this year is strong and next looks quieter, being paid in January is the better tax outcome. Getting paid still usually beats the timing advantage.
Does buying equipment in December reduce my tax bill?
It can, if the equipment is placed in service — bought and actually in use — by December 31, not simply ordered. For 2026 the special depreciation allowance is 100% for qualifying property and the Section 179 limit is $2,560,000. But a deduction returns your marginal rate, not the purchase price, so buying something you do not need still costs you money.
What is the deadline for a Solo 401(k)?
The plan has to be established before the tax year ends, on December 31. Contributions can be made later. A SEP-IRA is more forgiving: it can be opened and funded up to your filing deadline including extensions, which makes it the only option still available after December.
Is the fourth quarterly payment due December 31?
No. The fourth estimated tax payment for the 2026 tax year is due January 15, 2027. It is one of the few items on a year-end list that genuinely has slack in it.
Sources
- Publication 538, Accounting Periods and Methods — IRS. The cash method and constructive receipt: income counts when it is made available to you, not when you deposit it.
- Publication 946, How To Depreciate Property — IRS. The placed-in-service requirement, the 2026 Section 179 limits and the 100% special depreciation allowance.
- Standard mileage rates — IRS. The two 2026 business rates and the July 1 changeover.
- One-participant 401(k) plans — IRS. The requirement that the plan be established before the end of the tax year.
- Instructions for Forms 1099-MISC and 1099-NEC — IRS. The January 31 deadline and the $2,000 threshold for payments made in 2026.
Looking for more?
Related guides
- 1099-NEC: who gets oneThe threshold moved from $600 to $2,000.
- The 2026 mileage rateWhy this year needs two calculations.
- Retirement without a 401(k)Which plan, and which deadline applies to it.
- Quarterly estimated taxesThe January 15 payment and the safe harbor.
Elsewhere on BrassWell
- All guidesEverything we’ve written, in one place.
- Support Center48 answers, written the way these guides are.
- How BrassWell worksIncome, buckets, tax set-aside and invoicing.
- Ask us directlyA person replies, 9 AM–5 PM Pacific, Mon–Fri.
General information, not tax advice. The 2026 figures here were checked against the IRS and change from year to year. This describes federal rules for a sole proprietor using the cash method; the accrual method, entities and employees all change the answers. For anything specific to your situation, talk to a tax professional.