As 2026 ushers in sweeping tax reforms for business owners, CPA Ann Hartz, founder of Ann Hartz CPA in Des Moines, offers tactical steps business owners can take before January 1st to avoid overpaying their 2025 taxes.
Keep in mind, all of this advice may not apply to your specific situation. Heck, this summary was written by people that barely have a grasp on algebra, so please reach out to Hartz’s team or your own CPA with questions.
Iowa Tax Topics Covered
- Iowa’s new flat tax and loss of federal deduction write-offs
- When to switch from sole proprietorship to S corp (profit thresholds, cost-benefit analysis)
- Year-end tax planning and how to make depreciation work strategically
Paying your taxes is a civic duty, but no one wants to overpay and deal with uncertainty. Hartz offers a strategic roadmap to navigate the changes, explains when to switch from sole proprietorships to S corps, and when it’s appropriate to spend money at the end of the year to save on taxes, and when it’s stupid.
Context from an Iowa Business CPA
In this episode, Hartz delivers practical, timely advice for small and mid-sized business owners grappling with Iowa’s tax code overhaul, deductions, entity classifications, and year-end planning. Far from abstract theory, Hartz’s counsel is rooted in day-to-day realities and informed by decades of working with entrepreneurs who are often too buried in operations to see the broader financial picture.
The core message is clear: 2026 is not just another year—it marks a turning point in how businesses will be taxed, and proactive planning is essential. Hartz demystifies the Qualified Business Income (QBI) deduction, explains when and why business owners should consider switching from sole proprietorships to S corps, and underscores the importance of keeping accurate, up-to-date financials for making timely tax decisions. Iowa’s transition to a 3.8% flat tax may seem like a win, but hidden implications—such as the removal of previously deductible federal tax payments—can lead to unexpected liabilities.
“A sole proprietor on the profit will get hit with what we call self-employment tax, which is 15%. That’s really how a self-employed person pays into Social Security,” Hartz explains, drawing attention to the hidden costs of staying a sole proprietor too long.
Hartz walks listeners through the real-world advantages of the S corp election, noting that once a business clears $20,000–$25,000 in profit, the tax savings typically outweigh the added complexity and cost. She also addresses common misconceptions about year-end spending, highlighting the benefits—and limits—of accelerated depreciation under the revised bonus rules.
Do big purchases reduce taxes?
Do big purchases reduce taxes? Maybe. “If you’ve had some item or some piece of equipment or something that you know is your dream thing… now’s the time to buy it,” she advises, while cautioning against spending just to reduce taxes without a clear strategy.
Perhaps most importantly, Hartz urges entrepreneurs to maintain timely financial records and engage with a CPA throughout the year, not just during tax season. This ongoing relationship allows for real-time strategy adjustments, tax withholding optimization, and alignment with business growth goals. “Your financials can be a tool to help you grow your business if you keep them up and keep them current,” Hartz says, underscoring the missed opportunities of reactive tax preparation.
From clarifying deductions to illuminating the pitfalls of underpayment penalties, Hartz offers a compelling case for viewing tax planning not as a burden, but as a business growth tool. Her firm offers free one-hour consultations and supports businesses with bookkeeping, payroll, and tax services via cpadesmoines.com.