Permanent Extensions
Big Beautiful Bill (OBBB) signed. Tax Cuts and Jobs Act (TCJA) sunset averted. Key provisions now permanent.
QBI Deduction
Section 199A confirmed permanent. Deduct 20% of qualified business income.
- Eligible: Sole proprietors, LLCs, Partnerships, S-Corps.
- Benefit: Up to 20% reduction in taxable business income.
- Limit: Lesser of 20% QBI or 50% W-2 wages.
- Thresholds: Phase-out starts at $203,000 (Single) / $406,000 (Joint).
- Verify LLC compliance.
Bonus Depreciation
100% bonus depreciation permanent.
- Purpose: Immediate expensing for machinery, equipment, technology.
- Action: Deduct full cost in year of purchase.
- Eligibility: New and used qualifying property.
Personal Exemptions
Remains at $0. Permanent change. Focus on standard deduction.
SALT Cap
Updates to state and local tax deductions. Higher thresholds for 2026.
- 2026 Cap: $40,400 (Indexed for inflation).
- Phase-down: Begins at $505,000 MAGI (Single/Joint).
- Future: Reverts to $10,000 in 2030 unless extended.
- Strategy: Itemize if state/local taxes exceed standard deduction.
2026 Tax Brackets
Inflation-adjusted thresholds. Rates remain consistent.
Single Filers
- 10%: Up to $12,400.
- 12%: $12,401 – $50,400.
- 22%: $50,401 – $105,700.
- 24%: $105,701 – $201,775.
- 32%: $201,776 – $256,225.
- 35%: $256,226 – $640,600.
- 37%: Over $640,600.
Married Filing Jointly
- 10%: Up to $24,800.
- 12%: $24,801 – $100,800.
- 22%: $100,801 – $211,400.
- 24%: $211,401 – $403,550.
- 32%: $403,551 – $512,450.
- 35%: $512,451 – $768,700.
- 37%: Over $768,700.
Standard Deduction
Higher amounts for 2026.
- Married Filing Jointly: $32,200.
- Single / Married Filing Separately: $16,100.
- Head of Household: $24,150.
- Review 2026 rules.
New Credits
Incentives for small business employers. Higher maximums.
Childcare Credit
- Max Credit: Increased to $500,000.
- Small Business Eligibility: Up to $600,000.
- Scope: On-site care or contracted services.
- Action: Claim credit for facility costs and resource/referral expenses.
Retirement Credits
SECURE 2.0 expansions.
- Startup Costs: 100% credit for businesses with <50 employees.
- Contribution Credit: Offset employer contributions to new plans.
- Action: Implement 401(k) or SEP-IRA.
Compliance Actions
Execute these steps immediately. Ensure 2026 readiness.
Payroll Management
- Audit W-2 and 1099 filings.
- Review tax-free overtime rules.
- Update withholding for new 2026 brackets.
Expense Tracking
- Log all machinery and technology purchases.
- Maximize bonus depreciation.
- Categorize SSTB vs. non-SSTB income for QBI.
Entity Review
- Verify Registered Agent status.
- Confirm LLC compliance with state mandates.
- Download 2026 checklist.
HSA and Insurance
Maintain coverage. Utilize deductions.
- HSA Contribution Limit (Single): $4,400.
- HSA Contribution Limit (Family): $8,750.
- Catch-up (55+): $1,000.
- Insurance types: Car, Renters, Life.
Strategic Adjustments
Old methods obsolete. Update strategy now.
- Increase SALT deduction usage.
- Utilize higher standard deduction.
- Optimize pass-through distributions.
- Update tax strategy.
Directives
Perform these tasks to secure compliance.
Review Records
Analyze 2025 data. Project 2026 income. Identify bracket shifts.
Consult Professionals
Schedule MCG Service consultation. Review business formation. Address payroll setup.
File Early
Avoid penalties. Secure refunds. Use e-filing for 1099s.