Most year-end tax guides are organized by strategy. You get a list of twenty moves and you work out which ones apply to you, which is backwards, because roughly fifteen of them will not.
This one is organized by entity. Find the section that describes how your business is taxed, and everything in it is something you can actually use. The rest you can skip.
One thing worth saying before the details: 2026 is not a normal planning year. Several provisions of the One Big Beautiful Bill Act apply to a full tax year for the first time, and a few of them work in the opposite direction from what people expect. Charitable giving is the clearest example. If you carried last year's plan forward without looking, some of it is now wrong.
What changed for 2026
| Item | 2026 position | Why it matters for planning |
|---|---|---|
| Section 179 limit | $2,560,000, phasing out from $4,090,000 | Roughly double the pre-OBBBA ceiling. Most small businesses will never reach it, which means the practical limit is now your taxable income, not the cap. |
| Bonus depreciation | 100%, permanent | No more step-down schedule to plan around. Property acquired after January 19, 2025. |
| QBI (Section 199A) | Permanent. 2026 threshold $201,750 single / $403,500 joint | Phase-in range widened to $75,000 and $150,000. New $400 minimum deduction, but only for owners who materially participate and have at least $1,000 of QBI. |
| Charitable giving | 0.5% AGI floor for itemizers; $1,000 / $2,000 for non-itemizers; 1% floor for corporations | First year these apply. For many donors the deduction is now smaller, or zero. |
| 1099-NEC and 1099-MISC | Threshold rises to $2,000 for 2026 payments | First change since 1954. Attorney gross proceeds and royalties did not move. |
| 1099-K | Back to $20,000 and 200 transactions | Several states still require lower thresholds. |
| SALT cap | $40,400, reduced by 30% of MAGI above $505,000, never below $10,000 | Reverts to $10,000 in 2030 unless extended. The 30% clawback is steep enough to create a planning band just above $505,000. |
| QSBS (Section 1202) | $15 million cap, $75 million asset test, 50/75/100% at 3/4/5 years | Applies to stock acquired after July 4, 2025 only. |
| Estate and gift exemption | $15,000,000 per person | Annual gift exclusion stays at $19,000. |
The figures above come from Revenue Procedure 2025-32 and the OBBBA. Verify anything you plan to act on against current IRS guidance, because inflation-adjusted amounts move every year and some OBBBA provisions are still receiving implementation guidance.
The deadlines that shape the rest of the year
| Date | What is due | Who it applies to |
|---|---|---|
| Sep 15, 2026 | Q3 estimated tax; extended 2025 Forms 1120-S and 1065 | Passed |
| Oct 15, 2026 | Extended 2025 Form 1040 | Individuals on extension |
| Nov 16, 2026 | Extended 2025 Form 1120 | C corps, including foreign-owned |
| Dec 15, 2026 | Q4 estimated tax for corporations | C corps only |
| Dec 31, 2026 | Everything that cannot be extended | All entities |
| Jan 15, 2027 | Q4 estimated tax for individuals | Pass-through owners |
Six dates, and only one of them is genuinely hard. Filing extensions move the paperwork dates. Nothing moves December 31. For everything else on the calendar, including payroll and information return dates, see our full 2026 and 2027 tax due date calendar.
If you file a Schedule C
Sole proprietors and single-member LLCs that have not elected corporate treatment. Simplest structure, fewest levers, and the levers you do have all close on December 31.
- Retirement is your largest single deduction. A Solo 401(k) has to be adopted by December 31 even though you can fund it later; a SEP is more forgiving on the deadline but caps lower. Compare them properly before you pick.
- Equipment and vehicles have to be placed in service, not merely ordered. A December delivery with a January installation is a 2027 deduction.
- Your QBI deduction is straightforward below $201,750 of taxable income (single) and gets complicated above it. If you are near that line, a retirement contribution can pull you under it.
- Your state income tax stays on Schedule A and is stuck under the SALT cap. Schedule C filers cannot use a pass-through entity election, which in a high-tax state is a real argument for an S corp election in 2027.
- The January 15 estimated payment is the last one for 2026. If you have been guessing, the quarterly tax estimator will size it, and the estimated tax safe harbor rule explains how to make the payment penalty-proof regardless of how big 2026 turns out.
If you run an S corporation
The most common structure among our clients, and the one with the most moving parts in December.
- Reasonable compensation has to be right before the final payroll run. Too low invites reclassification; too low also shrinks your own QBI deduction if you are above the income threshold, because W-2 wages feed the wage limitation.
- Health insurance premiums for more-than-2% shareholders have to appear on your W-2 to be deductible. This one is missed constantly, and once payroll closes for the year it is a correction rather than a fix.
- An accountable plan and, where the facts support it, the 14-day home rental rule both need documentation in place before year-end, not a note written in April.
- Georgia and most other states now offer a pass-through entity election that moves state income tax off your personal Schedule A and out from under the SALT cap. It also reduces the QBI that flows to your K-1, so it is worth modeling rather than assuming.
- A cash balance or defined benefit plan can shelter far more than a Solo 401(k) if the profit supports it, and it must be adopted by December 31.
If you are a partnership or multi-member LLC
Everything in the S corp section about retirement plans and asset timing applies here too. Three things are specific to you.
- Losses are limited by your basis and by the at-risk rules. If the partnership had a loss year and you want to deduct your share, your basis has to support it by December 31. A capital contribution or a properly structured loan before year-end can be the difference between a deduction now and a suspended loss.
- Guaranteed payments are ordinary income to the partner and are not QBI. How you split guaranteed payments versus distributive share affects each partner's Section 199A outcome differently, and the operating agreement usually has not been looked at in years.
- Send partners estimated K-1 figures in December, not in March. Your partners cannot do their own year-end planning without a number from you, and the extended 1065 deadline in September is far too late to be useful to them.
If you run a C corporation
Flat 21% rate, a separate estimated tax regime, and a set of opportunities that pass-throughs do not have.
- Q4 estimated tax is due December 15, not January 15. A large corporation, generally one with $1 million or more of taxable income in any of the three preceding years, cannot rely on the prior-year safe harbor beyond the first installment.
- Qualified small business stock is the single largest planning item available to a C corporation shareholder, and the rules changed materially for stock issued after July 4, 2025. If you are raising or issuing equity before year-end, the issuance date now determines which regime applies.
- Corporate charitable giving now has a 1% floor as well as the existing 10% ceiling, so a small corporate gift may produce no deduction at all.
- Bonuses accrued to non-owner employees by December 31 are deductible in 2026 if paid within two and a half months after year-end. Bonuses to owners generally are not.
- If you capitalized research costs in 2022 through 2024, the OBBBA reopened expensing and there may be a refund sitting there. The recovery route is procedural and time-limited.
If your U.S. entity has a foreign owner
This is where the cost of getting it wrong stops being a percentage and becomes a flat penalty.
- A foreign-owned single-member LLC files a pro forma Form 1120 with Form 5472 attached, and the penalty is $25,000 per form. It applies even with no U.S. income and no U.S. activity. Owner capital contributions are reportable transactions.
- Non-residents cannot hold S corporation stock. That single rule collapses the entity decision for most foreign founders, which is why the conversation is usually about whether a C corporation plus QSBS beats a partnership, not about S status.
- Intercompany arrangements between your U.S. entity and a related foreign company need documentation dated before year-end. Reconstructing transfer pricing after the fact is expensive and unconvincing.
- Since January 1, 2026 a 1% excise tax applies to certain remittance transfers funded with cash, money orders or cashier's checks. Transfers funded from a U.S. bank account or card are excepted, so the funding method is the planning point.
Three things that apply to everyone
Regardless of structure, three items belong on every December list.
- Charitable giving under the 2026 rules. The 0.5% AGI floor means small annual gifts may now produce nothing, and bunching two years into one is frequently the better answer.
- Capital gain and loss timing. Trades have to be executed by December 31, and appreciated stock transfers take days to settle.
- Vendor file cleanup. Chase missing W-9s in December, not on January 28, and note that the new $2,000 threshold changes which vendors get a form but not what anyone owes.
Five things you can still do after December 31
Not everything closes with the year. If you are reading this in a panic, these five are still open in Q1 2027.
- Fund a Solo 401(k) or SEP that was adopted in time, up to your extended return due date.
- Make 2026 IRA and HSA contributions until April 15, 2027.
- File Form 2553 by March 16, 2027 to elect S status for the 2027 tax year.
- Pursue a research expensing recovery for earlier years, subject to the procedural deadlines.
- File an extension, which buys time to file but not time to pay.
How to sequence the rest of the year
Sixteen weeks left, and the useful order is not the order most people work in. Do not start with deductions. Start with the number.
September and October: get a projection. You cannot decide whether to accelerate or defer anything without knowing where 2026 is landing. Review your entity structure and your owner compensation while there is still time to change either.
November: execute the decisions that need lead time. Retirement plan documents, equipment orders that have to be installed before year-end, charitable gifts of appreciated stock, plan documents for any benefit starting January 1.
December: run the final payroll correctly, complete the gifts, confirm assets are actually in service, and chase W-9s. December is for finishing, not deciding.
The businesses that get a good result in April are almost never the ones that worked hardest in December. They are the ones that had a number in October.
Get the checklist
We keep a one-page checklist for each entity type, updated for 2026. Ask us for the one that matches your structure, and if the answer to more than two items on it is "I am not sure", that is worth thirty minutes with someone.
Manay CPA works with sole proprietors, S corporations, partnerships, C corporations and foreign-owned U.S. entities across all 50 states. Year-end planning slots fill by mid-December, so September and October are considerably better months to have this conversation than the last week of the year.
