2026 Year-End Tax Moves for Small Business Owners
The 2025 tax law changed several rules small business owners rely on, and most year-end tax moves only count if you act by December 31, 2026. Here is what changed, in plain English, and what to do before the year closes.
- By Pei Pierce, EA
- Georgetown, TX
- Updated November 2026
Can I still deduct 100% of new equipment in 2026?
Yes. 100% bonus depreciation is now permanent for qualifying property acquired after January 19, 2025, so you can deduct the full cost in the first year. The old phase-down schedule is gone.
- The equipment must be placed in service by December 31 to count for 2026. Ordering it is not enough.
- The full deduction isn't always best. It depends on your income this year and next.
- Talk to us before a big purchase so the timing works for you.
What is the Section 179 limit for 2026?
You can expense up to $2,560,000 of qualifying equipment. The limit phases down dollar for dollar once total purchases go above $4,090,000.
- Unlike bonus depreciation, you choose exactly how much to deduct.
- That makes it easier to match the deduction to your income.
Is the 20% QBI deduction still available?
Yes, and it is now permanent. Owners of pass-through businesses (sole proprietors, LLCs, S corporations and partnerships) can deduct up to 20% of qualified business income. For 2026, income limits start above $201,750 for single filers and $403,500 for married couples filing jointly.
Do I still send a 1099-NEC for contractors paid $600?
No. For payments made in 2026, a Form 1099-NEC is required only when you pay a contractor $2,000 or more for the year, up from $600.
- Gross proceeds paid to attorneys (such as settlements) still report at $600. Attorney fees follow the $2,000 rule.
- 1099s for 2026 payments are due February 1, 2027 (January 31 falls on a Sunday).
- Collect a W-9 from every contractor now. You can't know in advance who will cross $2,000.
When will I get a 1099-K from PayPal, Venmo or Square?
Only when you have more than $20,000 in payments and more than 200 transactions in the year.
- No form doesn't mean no tax. All business income is still reportable.
- Track app and card payments in your books.
Can my business contribute to employees' Trump Accounts?
Yes. Employers can contribute up to $2,500 per employee per year to Trump Accounts for an employee or the employee's children. It is excluded from the employee's federal taxable income, although payroll taxes may still apply.
- Requires a separate written plan that can't favor owners or highly paid employees.
- Self-employed owners (sole proprietors and partners) are not eligible.
- The rules are still proposed. If your employees have kids, plan for 2027.
How much can I put in a Solo 401(k) for 2026?
| Employee contribution | $24,500 |
| Employer contribution | Up to 25% of pay* |
| Combined maximum | $72,000 |
| Catch-up, age 50+ | +$8,000 |
| Catch-up, ages 60–63 | +$11,250 |
*About 20% of net earnings if self-employed. The ages 60–63 catch-up replaces the $8,000. Setup and contribution deadlines apply, so ask before year-end.
What year-end tax moves should I make before December 31?
- Get your books up to date. Reconciled books mean better decisions now and a faster tax return later.
- S corp owners: pay yourself a reasonable salary through payroll this year.
- Collect W-9s from contractors so your 1099s are ready by February 1.
- Check your January 15 estimate. A strong year may call for a larger fourth-quarter payment.
Book a free 15-minute year-end check-in
Not sure which of these apply to you? We'll catch up on your year, talk through next year's goals and answer quick questions. If something needs a deeper look, you'll get a short proposal with scope and fee first.
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Sources: IRS Rev. Proc. 2025-32 (2026 inflation adjustments), IRS 2026 retirement plan limits (Notice 2025-67), IRS Notice 2026-11 (bonus depreciation), and Treasury/IRS proposed regulations under Section 128 (August 2026). This article is general information, not tax advice for your specific situation.