Planning Priorities: Reduce taxable income, maximize available deductions, evaluate entity-level elections, and prepare for 2027.
2026 Legislative Emphasis: Permanent 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025; changes to Section 179 limitations; permanent extension of the QBI deduction; and revised business interest limitation calculations.
- Review projected 2026 taxable income and compare it with 2025 results.
- Evaluate whether to accelerate deductible expenses or defer income, considering accounting methods and anticipated future tax rates.
- Review purchases of equipment, machinery, vehicles, and qualifying improvements for bonus depreciation and Section 179 expensing.
- Evaluate the 20% qualified business income (QBI) deduction for eligible pass-through businesses.
- Review owner compensation, including reasonable compensation for S corporation shareholders.
- Evaluate state pass-through entity tax (PTET) elections and payment deadlines.
- Review retirement plan contributions, employer matching, profit-sharing arrangements, and potential new plan opportunities.
- Identify opportunities to deduct bad debts, obsolete inventory, and other qualifying business losses.
- Review business interest expense limitations and available exceptions.
- Evaluate accounting methods, inventory treatment, and potential small-business tax simplifications.
- Review shareholder loans, distributions, partner basis, at-risk limitations, and suspended losses.
- Update federal and state estimated tax projections and identify opportunities to reduce underpayment penalties.