Tax planning is what you do between January and December. The return is just the report. In 2026 the federal rules are unusually settled — the One Big Beautiful Bill Act (OBBBA), signed in July 2025, made the Tax Cuts and Jobs Act brackets and the 20% qualified business income (QBI) deduction permanent — so what you owe now comes down to execution: clean books, correct timing, the right entity, and funded retirement accounts.
One warning before anything else. The IRS raised the standard mileage rate mid-year. If you are still applying a single rate to all of 2026, you are under-deducting every mile you drive after June 30.
Mileage: 2026 has two rates, not one
| Purpose | Jan 1 – Jun 30, 2026 | Jul 1 – Dec 31, 2026 |
|---|---|---|
| Business | 72.5 cents/mile | 76 cents/mile |
| Medical and qualified military moving | 20.5 cents/mile | 23.5 cents/mile |
| Charitable | 14 cents/mile | 14 cents/mile (set by statute) |
Split your mileage log at June 30 and apply each rate to the miles actually driven in that window. A business logging 25,000 miles spread evenly across the year deducts roughly $18,560 — not the $18,125 a flat 72.5-cent assumption produces.
Be precise about what that means. A deduction is not a refund. An $18,560 deduction at a 24% marginal rate is about $4,450 of federal income tax, plus additional self-employment tax savings if you file as a sole proprietor or single-member LLC.
What OBBBA locked in
The rate structure. Seven brackets — 10%, 12%, 22%, 24%, 32%, 35%, 37% — are permanent. The 37% bracket starts above $640,600 (single) and $768,700 (married filing jointly) in 2026.
Standard deductions for 2026. $32,200 married filing jointly, $16,100 single or married filing separately, $24,150 head of household. The MFJ figure is up $700 from 2025's $31,500 — OBBBA had already raised the 2025 amount, so the year-over-year change is modest.
The QBI deduction. Pass-through owners can still deduct up to 20% of qualified business income, and the deduction no longer sunsets. Two changes matter for tax years beginning after December 31, 2025: there is now a $400 minimum deduction available if you have at least $1,000 of QBI from an active business you materially participate in, and the phase-in ranges widened to $75,000 (single) and $150,000 (joint).
100% bonus depreciation. Restored permanently — but the trigger is the acquisition date, not the placed-in-service date. Property acquired after January 19, 2025 qualifies for 100%. Property you locked in under a binding contract on or before January 19, 2025 stays on the old phase-down schedule at 40%, even if it goes into service in 2026.
The 1099 threshold. Form 1099-NEC and 1099-MISC filing kicks in at $2,000, up from $600, for payments made on or after January 1, 2026. Payments below the threshold are still fully deductible to you and still fully taxable to the recipient — you just don't file the form. Keep tracking them anyway; you need the records to support the deduction. The 1099-K threshold is unchanged at $20,000 and 200 transactions.
Employer childcare credit. Expanded from $150,000 to $500,000 per year for most employers, and up to $600,000 for eligible small businesses that provide or fund childcare benefits.
Retirement contributions: your largest legal lever
| Plan | 2026 limit | Age 50+ catch-up | Worth knowing |
|---|---|---|---|
| 401(k) / solo 401(k) | $24,500 employee deferral | +$8,000 (or +$11,250 at ages 60–63) | Total employee + employer additions cap at $72,000 |
| SEP IRA | Lesser of $72,000 or 25% of compensation | None | Fundable through the extended filing deadline |
| SIMPLE IRA | $17,000 | +$4,000 ($21,000 total) | For employers with 100 or fewer employees; requires an employer contribution |
| Traditional / Roth IRA | $7,500 | +$1,100 ($8,600 total) | Roth phases out at $153,000–$168,000 single, $242,000–$252,000 joint |
One correction you will not find in most articles: the SEP "25%" figure applies to W-2 compensation. If you are self-employed with no wages, your effective ceiling is roughly 20% of net self-employment income after subtracting one-half of self-employment tax. Contribute a straight 25% of net profit and you have over-contributed, with a 6% excise tax on the excess each year it stays in the account.
Equipment: expensing is real, but three limits apply
Section 179 lets you expense up to $2,560,000 of qualifying property in 2026, phasing out dollar-for-dollar once total property placed in service exceeds $4,090,000. Machinery, computers, most software, office furniture, and qualified improvement property all qualify. Then the exceptions start.
Heavy SUVs are capped. An SUV rated above 6,000 lbs GVWR and not more than 14,000 lbs is limited to $32,000 of Section 179 expensing for tax years beginning in 2026 — not the full $2,560,000. Assume otherwise on a $90,000 vehicle and you overstate the deduction by tens of thousands.
"In service by December 31" is not a universal rule. It gives you a full deduction only if the asset is fully expensed under Section 179 or 100% bonus depreciation. Under regular MACRS, the half-year convention gives you half a year of depreciation no matter when in the year you buy. Worse, if more than 40% of the year's total asset basis lands in the fourth quarter, the mid-quarter convention applies and cuts it further — which is precisely what a December buying spree creates.
Expensing is timing, not magic. Writing off $50,000 today does not create a deduction you wouldn't otherwise get; it pulls forward deductions you'd receive over the asset's life. It also reduces QBI, shrinking your 199A deduction, and it sets up depreciation recapture taxed as ordinary income when you sell. In Florida there is no state income tax deduction to layer on top, so the federal timing benefit is the whole benefit.
Estimated taxes: the safe harbors matter more than the $1,000 rule
2026 due dates: April 15, June 15, September 15, and January 15, 2027. June 15 falls on a Monday this year — there is no weekend shift.
Yes, a penalty can apply if you owe $1,000 or more at filing. But that is only one of several ways out. You avoid the penalty entirely if you pay at least 90% of this year's tax, or 100% of last year's tax (110% if your prior-year AGI exceeded $150,000) — regardless of how large the April balance is. Use the prior-year safe harbor in a growth year and you can owe a very large amount at filing with no penalty at all.
The interest rate on underpayments resets quarterly. In 2026 it has run 7% for Q1, 6% for Q2, and 7% for Q3, compounded daily. Setting aside 25–30% of every payment you receive is a reasonable starting estimate, and it works better in Florida than most states because there is no state individual income tax to reserve for. It is not a rule. A 32%-bracket owner also paying 15.3% self-employment tax will under-reserve at 25%; a low-profit owner with a strong QBI deduction will tie up cash unnecessarily. Refine it against an actual projection.
Deductions people get wrong
Home office. Requires exclusive and regular business use of the space. The simplified method is $5 per square foot up to 300 square feet.
Self-employed health insurance. This is not a flat 100% deduction. You get no deduction for any month you were eligible to participate in a subsidized health plan through your own employer, your spouse's employer, a dependent's employer, or a child's employer — eligibility alone disqualifies you, even if you declined the coverage. The deduction is also capped at earned income from the specific business the plan is established under. If your spouse has employer coverage available to you, assume this deduction is off the table until someone confirms otherwise.
Meals and entertainment. Business meals are 50% deductible; document who was there and the business purpose. Entertainment is generally not deductible at all — the two are not a single category.
Education and software. Education is deductible only if it maintains or improves skills for the business you are already in. Training that qualifies you for a new trade or business is not deductible. Most software is deductible or expensable under Section 179, but purchased software with a longer useful life may require amortization, and internally developed software falls under separate rules.
Entity structure, QBI, and why Florida changes the math
S-corp election splits your income between W-2 wages and distributions. Distributions are not subject to self-employment tax; wages are. That is the entire benefit, and the IRS requires the wage portion to be reasonable compensation for the work you actually do.
You will see a $40,000–$50,000 net profit figure quoted as the break-even. Treat it as a prompt to run the numbers, not a threshold. It has no statutory basis, and at that profit level payroll administration, a separate Form 1120-S, registered agent and Florida reemployment tax obligations, and reasonable-compensation exposure often eat the savings. S-corp wages also reduce QBI, partially offsetting the benefit.
Here is the part the generic advice misses: Florida has no individual income tax, so the full value of a well-structured pass-through lands federally with no state-level clawback or added state filing burden. Owners in high-tax states have to net the federal benefit against state treatment. You don't. That makes the analysis cleaner and, in most cases, more favorable.
Two Florida caveats. Corporations pay Florida corporate income tax at 5.5%, so a C-corp election is a genuinely different decision here than an S-corp election. And the QBI deduction is fully disallowed above the 2026 thresholds ($201,750 single / $403,500 joint) for specified service trades or businesses — accounting, law, consulting, health, financial services. The often-quoted "37% drops to 29.6%" figure is a best case that many service-business owners will never see, because at those income levels they are past the phase-out.
Florida items that are easy to miss
- Sales and use tax. The state rate is 6%, and most counties add a discretionary sales surtax on top. Rates and expiration dates vary by county, and the surtax applies only to the first $5,000 of a single sale of tangible personal property. Verify your county's current rate with the Florida Department of Revenue — Orange, Duval, and Miami-Dade are not the same.
- Reemployment tax. If you have employees — including yourself as an S-corp owner on payroll — you have a Florida reemployment tax obligation.
- Tangible personal property tax. Counties assess business equipment and furniture. The return goes to your county property appraiser by April 1, and there is an exemption for a modest amount of value if you file on time. Expensing an asset federally does not remove it from this return.
- Hurricane season. A cash reserve of two to three months of fixed expenses is prudent everywhere and close to mandatory here. Keep it in a separate business savings account. Document asset condition and cost basis before storm season, not after.
Non-resident founders: what actually applies to you
BOI reporting. FinCEN's interim final rule of March 26, 2025 removed the requirement for all entities formed in the United States and all U.S. persons. If you formed a Florida LLC, you have no BOI filing obligation. If your entity was formed under foreign law and registered to do business in a U.S. state, you remain in scope — that distinction is the whole rule now.
Foreign-owner information reporting. A U.S. corporation that is 25% foreign-owned, or a foreign-owned single-member LLC treated as a disregarded entity, generally must file an annual federal information return reporting transactions with related parties. Non-filing carries a substantial, automatic penalty. This catches a lot of founders who assume a zero-revenue LLC has nothing to file.
A U.S. LLC is not automatically tax-free. Whether income is taxable in the U.S. depends on whether it is effectively connected with a U.S. trade or business, on withholding rules for certain payments, and on any applicable treaty. Get this analyzed before the first invoice, not at filing.
What to do next
Work through these in order before December 31:
- Fix your mileage log. Split it at June 30 and apply 72.5 cents and 76 cents to the correct halves.
- Run an estimated tax projection and pick your safe harbor deliberately — 90% of current year or 100%/110% of prior year.
- Fund retirement to the actual limit, using the correct self-employed SEP math if that's your plan.
- Check the acquisition date on anything you're depreciating, not just the in-service date.
- Confirm your self-employed health insurance eligibility month by month, especially if a spouse has employer coverage.
- Review entity structure once a year, with the QBI and SSTB rules and Florida's no-income-tax position in the model.
- Separate business and personal accounts if you haven't. This is a substantiation and recordkeeping argument, not an audit-trigger scare story: commingled accounts make deductions hard to prove and easy to lose.
Accounting BOSS works with small businesses in Orlando, Jacksonville, and Miami, and with non-resident founders forming U.S. companies. If you want a second set of eyes on any of the above before year-end, request a consultation.
This article is general information, not tax advice for your situation. Figures indexed annually should be confirmed against current IRS guidance before you rely on them.
This is general information, not tax advice for your situation, and reading it does not make you a client. Rules and figures change — verify anything time-sensitive before you act on it. We'll talk it through with you free.
Common questions
There are two. The IRS rate is 72.5 cents per mile for miles driven January 1 through June 30, 2026, and 76 cents per mile from July 1 through December 31 after a mid-year adjustment. Medical and qualified military moving mileage went from 20.5 cents to 23.5 cents on the same date. The charitable rate stays at 14 cents all year because it is set by statute. Split your log at June 30 and apply each rate to the miles actually driven in that window.
The Form 1099-NEC and 1099-MISC filing threshold rose from $600 to $2,000 for payments made on or after January 1, 2026, so you do not file for a contractor you paid less than $2,000 during the year. Three things do not change: the payment is still fully deductible to you, it is still fully taxable to the recipient, and you still need the records to substantiate the deduction. The 1099-K threshold is separate and unchanged at $20,000 and 200 transactions.
No. FinCEN's interim final rule published March 26, 2025 redefined 'reporting company' to cover only entities formed under foreign law that have registered to do business in a U.S. state. Every entity created in the United States, and every U.S. person, is exempt from beneficial ownership reporting. If you are a non-resident founder whose entity was formed abroad and then registered in Florida or another state, you are still in scope. Do not pay anyone to file a BOI report for a domestically formed LLC.
Not necessarily. The $1,000 threshold is only one route to avoiding the estimated tax penalty. You are also protected if you paid at least 90% of the current year's tax through withholding and estimates, or 100% of the prior year's tax (110% if your prior-year AGI was over $150,000). Under the prior-year safe harbor you can owe a very large amount at filing and still face no penalty. That makes it the most useful planning tool in this whole topic, especially in a fast-growth year.
Maybe, and it is a calculation rather than a threshold. The benefit is that distributions escape self-employment tax while your W-2 wages do not, and the IRS requires those wages to be reasonable compensation for the work you do. The commonly quoted $40,000-$50,000 profit break-even has no statutory basis; at that level payroll administration, a separate Form 1120-S, registered agent fees, and Florida reemployment tax often consume the savings. S-corp wages also reduce your QBI deduction. Florida's lack of a state individual income tax does make the analysis cleaner than in most states, because the full benefit lands federally with no state-level offset.
Only partly. Section 179 expensing for an SUV rated above 6,000 lbs GVWR and not more than 14,000 lbs is capped at $32,000 for tax years beginning in 2026 — not the general $2,560,000 limit. Bonus depreciation may cover part of the remaining basis if the vehicle was acquired after January 19, 2025, and everything is prorated by business-use percentage, which you have to substantiate with a mileage log. A $90,000 SUV is not a $90,000 first-year deduction.