As the end of 2026 gets closer, you may already be thinking about year-end tax planning.
Maybe you’re reviewing equipment purchases, estimating your final business profit, or talking with your tax professional about deductions.
But there’s another area that deserves a spot on that list:
Your retirement plan.
Retirement contributions can help you build long-term financial security while potentially creating valuable tax-planning opportunities. And for business owners, the conversation can go beyond simply contributing to a personal retirement account.
Depending on your business, plan, employees, and financial situation, there may be opportunities involving employee deferrals, employer contributions, profit-sharing, or other retirement strategies.
The problem?
Too many business owners wait until tax season to start asking about them.
By then, some opportunities or deadlines may have already passed.
So before 2026 ends, let’s look at what law firm and franchise restaurant owners should have on their radar.
Retirement Contribution Limits Increased for 2026
The IRS increased several retirement-plan contribution limits for 2026.
For employees participating in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan, the employee contribution limit increased to $24,500 for 2026, up from $23,500 in 2025.
For participants age 50 and older, the general catch-up contribution limit increased to $8,000.
And thanks to changes introduced under SECURE 2.0, eligible participants ages 60 through 63 can have a higher catch-up contribution limit. For 2026, that limit is $11,250.
The overall defined contribution limit—the maximum annual additions from applicable employee and employer contributions—is $72,000 for 2026, subject to the applicable rules.
Those numbers create potential planning opportunities, especially for business owners who haven’t reviewed their retirement contributions recently.
There’s Also a New Roth Catch-Up Rule in 2026
One change that deserves particular attention this year involves catch-up contributions.
Beginning in 2026, certain higher-paid employees who make catch-up contributions to a 401(k), 403(b), or governmental 457(b) plan may be required to make those catch-up contributions as Roth contributions rather than pre-tax contributions.
For 2026, this generally applies when the participant had more than $150,000 in prior-year FICA wages from the employer sponsoring the plan, assuming the plan offers the applicable Roth feature.
Why does that matter?
Traditional pre-tax contributions can generally reduce current taxable income, while Roth contributions are made after tax.
That doesn’t necessarily make one “better” than the other. It simply means the tax treatment is different.
If you or highly compensated members of your team make catch-up contributions, this is something to review with your plan administrator and tax professional rather than assuming everything will work exactly as it did last year.
Why Law Firm Owners Should Review Their Retirement Strategy
For solo attorneys and small law firm owners, retirement plans can be an important part of broader year-end tax planning.
Depending on the firm’s structure and whether it has employees, options could include a Solo 401(k), SEP IRA, traditional 401(k), SIMPLE IRA, or another qualified retirement plan.
But the best option isn’t simply the plan with the highest possible contribution.
You also need to consider:
- Business profitability
- Owner compensation
- Number of employees
- Employee eligibility
- Required employer contributions
- Cash flow
- Administrative responsibilities
- Your personal retirement goals
For example, a solo attorney with no employees other than a spouse may have very different planning opportunities from a law firm with 15 employees.
The goal is to find a strategy that makes sense for the business and the owner, not just one that generates the biggest deduction on paper.
Franchise Restaurant Owners Have a Different Challenge
For franchise restaurant owners, retirement planning can become more complicated because there may be a much larger workforce involved.
A restaurant owner might have managers, full-time employees, part-time workers, and employees with varying tenure and compensation.
If you own multiple locations, the picture can become even more complex.
That means retirement-plan decisions can involve questions such as:
- Which employees are eligible?
- What employer contributions or matches are required?
- How much will those contributions cost across the workforce?
- Are payroll records accurate?
- Is the plan being administered correctly?
- How does the plan affect recruiting and retention?
A retirement plan can potentially provide tax benefits while also becoming part of your employee benefits strategy.
But those benefits need to fit comfortably within the restaurant’s cash flow and operating model.
Don’t Look at Retirement Planning in Isolation
Retirement contributions are only one piece of your year-end tax strategy.
You may also be considering:
- The QBI deduction
- 100% bonus depreciation
- Section 179
- Equipment purchases
- Owner compensation
- Estimated tax payments
- Other deductible business expenses
These decisions can interact.
For example, deductible employer retirement contributions may affect business income, while changes to taxable income may influence other tax calculations.
That’s why it’s usually better to look at your entire year-end financial picture rather than making each decision separately.
Start With Accurate Numbers
Before discussing how much you should contribute, make sure you know what the business can actually afford.
Review your:
✔ Year-to-date Profit & Loss Statement
✔ Current cash position
✔ Projected profit through December
✔ Payroll records
✔ Existing retirement contributions
✔ Planned year-end expenses
✔ Upcoming cash needs
This is where good bookkeeping becomes essential.
A tax strategy that looks great on paper isn’t very helpful if making a large contribution leaves the business struggling to cover payroll, rent, inventory, or other expenses in January.
Your retirement strategy should support your long-term goals without creating a short-term cash-flow problem.
Don’t Wait Until December 31
Another common mistake is assuming every retirement-plan decision can be made after the year ends.
Deadlines can vary based on the type of plan, contribution, business structure, and circumstances. Some plans or elections may need to be established or completed before year-end, while certain employer contributions may have later deadlines.
Payroll elections can also require advance processing.
In other words:
Don’t assume you can figure everything out when you’re preparing your tax return.
October gives you time to ask questions, review your options, make payroll adjustments when appropriate, and coordinate with your retirement-plan administrator and tax professional.
Ask These Questions Before Year-End
As you review your 2026 retirement strategy, consider asking:
- Am I maximizing the retirement opportunities that make sense for me?
- Have I reviewed the increased 2026 contribution limits?
- Does the new Roth catch-up rule affect me or anyone on my team?
- Are our payroll and contribution records accurate?
- Could employer contributions make sense this year?
- How would additional contributions affect business cash flow?
- How does retirement planning fit with our other year-end tax strategies?
- Are there any decisions or deadlines we need to address before December 31?
You don’t need to know all the answers yourself.
You just need to start the conversation early enough to have options.
The Bottom Line
Retirement planning isn’t only about preparing for someday.
For business owners, it can also be an important part of today’s compensation, cash-flow, employee-benefit, and tax-planning strategy.
For law firm owners, that may mean reviewing how much you’re contributing and whether your current plan still fits your firm’s size and profitability.
For franchise restaurant owners, it may mean balancing owner retirement goals with employee eligibility, employer contributions, payroll administration, and cash flow.
Either way, don’t wait until tax season to discover that you could have approached 2026 differently.
Use the final months of the year to review your numbers, understand your options, and coordinate your retirement strategy with the rest of your tax planning.
Ready to Review Your Year-End Financial Picture?
If you’re not sure whether your bookkeeping and financial records are ready for year-end tax planning, contact us today.
We can help you get your books current, review your year-to-date financials, and organize the information you and your tax professional need to evaluate retirement contributions and other year-end tax strategies.
The goal isn’t simply to find another deduction. It’s to make smart financial decisions today while