2026 Tax Landscape
IRS rules changed. The "One Big Beautiful Bill Act" (OBBBA) is active. Previous strategies are obsolete. Update your filings now.
1. Permanent QBI Deduction
The 20% Qualified Business Income (QBI) deduction is permanent. Stop waiting for extensions. Model your income against new thresholds.
- Single filers: $203,000 threshold.
- Married filing jointly: $406,000 threshold.
- Action: Calculate QBI early. Avoid the phase-out range.
- Link: Schedule Tax Planning
2. Bonus Depreciation Hack
100% bonus depreciation returned for 2026. Deduct the full cost of equipment in year one.
- Requirement: Property must be "in service" by December 31, 2026.
- Eligible assets: Machinery, equipment, computers, furniture.
- Action: Front-load capital purchases. Finalize installations before year-end.
3. Record Business Mileage
The 2026 business mileage rate is 72.5¢ per mile. Capture every drive.
- Requirement: Maintain digital logs.
- Data needed: Date, destination, business purpose, starting/ending odometer.
- Action: Download a tracking app. Sync with your calendar. Reconcile monthly.
4. Payroll Reporting Update
New rules for 2026 require separate reporting for tips and overtime. Non-compliance triggers IRS audits.
- Requirement: Use separate fields on Form W-2 and 1099-NEC.
- Employee impact: Workers claim deductions for tips and overtime at the individual level.
- Action: Update payroll software. Categorize pay types correctly.
- Link: Set Up Payroll Services
5. Childcare Credit Expansion
Credits for employer-provided childcare increased. The maximum annual credit is now $600,000 for small businesses.
- Credit Rate: 50% of qualified childcare expenditures.
- Small Business Max: $600,000.
- Action: Formalize childcare subsidies. Document all qualified costs. Lower your after-tax operating expense.
6. Retirement Plan Incentives
SECURE 2.0 credits expanded under OBBBA. Start a plan for zero net cost.
- Credit: Up to 100% of plan startup costs.
- Employer Match Credit: Offsets employee contributions for small firms.
- Action: Adopt a Safe Harbor 401(k). Maximize matching credits. Reduce taxable corporate income.
7. Entity Structure Audit
Business structure determines tax liability. 2026 changes favor specific entities.
- LLC/S-Corp: Optimize QBI and self-employment tax.
- C-Corp: Leverage QSBS gain exclusions up to $15 million.
- Action: Review formation documents. Switch entities if income exceeds QBI thresholds.
- Link: Start Business Formation
2026 Filing Deadlines
| Entity Type | Deadline | Extension |
|---|---|---|
| Partnership | March 16, 2026 | Sept 15, 2026 |
| S-Corp | March 16, 2026 | Sept 15, 2026 |
| C-Corp | April 15, 2026 | Oct 15, 2026 |
| Sole Prop | April 15, 2026 | Oct 15, 2026 |
Immediate Directives
- Subscribe: Get e-News for Small Businesses.
- E-file: Avoid paper processing delays.
- Pay: Submit estimated taxes quarterly.
- Consult: Contact MCG Service for professional prep.