1. Permanent QBI Deduction
Claim the 20% Qualified Business Income (QBI) deduction. Legislation made this permanent. Note the new minimum: taxpayers with at least $1,000 in business income qualify for a $400 deduction. This applies even if income exceeds standard phase-out limits. Verify eligibility for S-Corps and LLCs.
2. Standard Deduction Increases
Apply new thresholds. For 2026, the standard deduction is $16,100 for single filers. Married couples filing jointly use $32,200. Head of household filers use $24,150. Adjust estimated tax payments to reflect these higher amounts.
3. 1099-NEC Reporting Threshold
Follow the "One Big Beautiful Bill" (OBBB) update. The reporting threshold for Form 1099-NEC increased to $2,000. Do not issue forms for payments under this amount. Verify contractor tax IDs before filing. Review the full 2026 checklist.
4. Enhanced Childcare Credit
Maximize the Employer-Provided Childcare Credit. The rate increased to 40% of eligible costs. Small businesses qualify for 50%. The maximum annual credit jumped to $600,000 for eligible small enterprises. Track all facility and subsidy expenses.
5. 100% Bonus Depreciation
Write off the full cost of qualified property. Legislation reinstated 100% bonus depreciation for assets placed in service after January 19, 2025. Apply this to equipment, machinery, and business vehicles. Consult tax planning services for asset classification.
6. Higher SALT Deduction Cap
Deduct more state and local taxes. The SALT cap increased to $40,400 for 2026. This higher limit benefits business owners in high-tax states. Ensure itemized deductions surpass the new standard deduction levels.
7. Startup Expense Deductions
Deduct 100% of startup costs for businesses launched in 2026. IRS limits apply to total investment. Include legal fees, market research, and pre-opening advertising. Register your business correctly to secure these write-offs.
8. Business Mileage Rate
Use 72.5 cents per mile for all business travel. This applies to cars, vans, and trucks. Maintain a contemporaneous mileage log. Record dates, destinations, and business purposes.
9. Social Security Tax Ceiling
Update payroll systems. The maximum net self-employment earnings subject to Social Security tax is $184,500 for 2026. Monitor income thresholds for owners and high-earning employees. Avoid overpayment of payroll taxes.
10. BOI Compliance
File Beneficial Ownership Information (BOI). Reporting to FinCEN is mandatory. Daily penalties apply for non-compliance. Confirm your filing status for all LLC and corporate entities.
Action Required
- Review 2025 records.
- Update payroll software.
- Schedule tax planning.
- Contact MCG Service for professional preparation.