New Reality
Avoid 2025 assumptions. Use 2026 rules. "One Big Beautiful Bill" (OBBB) passed. Working Families Tax Cuts active. Most TCJA provisions permanent. Tax cliff removed. Stability established. Verify compliance immediately.
QBI Permanent
Section 199A remains. 20% deduction secured. Small businesses keep relief. Average $4,600 saved. Pass-through entities eligible. Sole proprietors included. Economic growth projected.
Avoid Pitfall
Don't assume automatic. Manage income phase-ins. Adjust joint filers ($403,500–$553,500). Monitor single filers ($201,750–$276,750). Classify SSTBs correctly. Calculate reasonable wages. Document entity structure.
Bonus Depreciation
Deduct 100% cost. Qualifying business property. Immediate first-year write-off. Accelerate capital recovery. Maximize 2026 cash flow. Upgrade equipment now.
Service Dates
Place assets in-service. Purchase date insufficient. Verify operational status. Document usage logs. Avoid 2027 shifts. Plan late-year acquisitions. Forecast future income. Balance front-loaded deductions.
Gig Reporting
Reporting thresholds changed. $600 rule eliminated. New $20,000 threshold. 200 transaction minimum. Venmo, PayPal, Zelle covered. Backup withholding simplified.
Tax Liability
Track all income. 1099 absence irrelevant. Income remains taxable. Maintain independent records. Verify state thresholds. Lower limits apply. Reconcile payment platforms.
Tips Overtime
New deductions active. 2026–2028 window. Employee tax relief. Senior worker cuts. $1,750 average savings. Employer tracking mandatory.
System Updates
Modify payroll software. Track qualified tips. Record overtime hours. Report separately. Meet IRS guidance. Avoid audit flags. Educate staff. Ensure claim eligibility.
Childcare Credits
Enhanced credit caps. Small businesses prioritized. Maximize $600,000 credit. 50% expense coverage. $1.2 million spend limit. Support working parents. Improve retention.
Compliance Rules
Follow qualification details. Document daycare expenses. Verify wage policies. Support credits rigorously. Prepare for audits. Retain receipt records. Confirm facility eligibility.
Expired Credits
Work Opportunity Tax Credit (WOTC) ended. Renewable energy incentives reduced. BEAT rates increased (10.5%). GILTI percentages adjusted (14%). International rules shift.
Strategy Shift
Stop WOTC projections. Verify expiring incentives. Adjust hiring budgets. Review foreign income. Re-evaluate domestic credits. Consult tax professionals. Pivot financial plans.
Standard Deductions
2026 rates increased. Joint filers: $32,200. Single: $16,100. Head of Household: $24,150. Personal exemptions eliminated. Child Tax Credit: $2,200. 37% top rate.
Mileage Rates
Use 72.5 cents. Standard business mileage. Log every trip. Date, purpose, miles. Maintain contemporaneous records. Don't mix methods. Choose actual vs. standard.
Action Plan
- Schedule tax planning.
- Review OBBB impact.
- Update payroll reporting.
- Verify asset service-dates.
- Audit QBI thresholds.
- Track mileage daily.
- Contact MCG Service.