What Your Small Business Should Be Doing Right Now to Cut Its 2026 Tax Bill

Q3 is underway, and there are only a little over three months left in the 2026 tax year. Whatever you do – or don’t do – by December 31 can affect your tax bill for the year.

That timing matters more in 2026 than usual. The One Big Beautiful Bill Act (OBBBA) permanently changed several rules small businesses rely on: bonus depreciation, the Section 179 deduction, and the 20% pass-through deduction all got more generous. Some of these moves only work if you act before year-end. Others hinge on a payment deadline that’s fast approaching.

This isn’t a comprehensive tax guide. It’s a practical list of what to check this quarter, based on what actually changed for 2026 and what business owners tend to miss.

Watch Out: This article explains what’s available; it isn’t personalized tax advice. Your entity type, income level, and state rules all affect which of these apply to you. Confirm specifics with a CPA or enrolled agent before you act.

What Actually Changed for 2026

Three OBBBA provisions are worth knowing before you plan anything else.

Bonus depreciation is back to 100%, permanently. For assets acquired and placed in service after January 19, 2025, you can deduct the full cost in year one instead of spreading it over several years.

Section 179 expensing got a real bump. The 2026 limit is $2,560,000, with the phase-out starting once total equipment purchases exceed $4,090,000. 

The QBI deduction is now permanent, with better thresholds. The 20% qualified business income deduction under Section 199A no longer sunsets. For 2026, the full deduction phases in up to $75,000 of taxable income for single filers and $150,000 for married filing jointly, up from $50,000 and $100,000 previously. There’s also a new $400 minimum deduction for any active owner with at least $1,000 in qualified business income, even if other limits would otherwise wipe it out.

In practice, these three changes are why “buy equipment in December” and “check your QBI eligibility” are more valuable moves this year than they were in 2023 or 2024.

Action 1: Time Your Equipment Purchases Deliberately

If you’re planning to buy equipment, software, or vehicles this year, the math changed in your favor.

1. Total up what you expect to spend on qualifying property before December 31.
2. If it’s under $2,560,000, Section 179 lets you write off the full cost immediately, subject to your business income for the year.
3. For anything left over, or for property that doesn’t qualify for Section 179, 100% bonus depreciation covers the rest, with no income limit.

Pro Tip: Section 179 is capped by your net business income; bonus depreciation isn’t. If you’re near a loss for the year, lean on bonus depreciation instead of forcing a Section 179 election you can’t fully use.

A common mistake here is buying equipment in late December but not getting it “placed in service”, installed and usable, before year-end. For depreciation purposes, the property generally must be placed in service, meaning ready and available for its intended business use, during the tax year. If a vendor can’t deliver and install by December 31, the deduction slides to 2027.

Action 2: Open or Fund a Retirement Plan

Retirement contributions are one of the few deductions that also build your own savings, and the 2026 limits are higher across the board.

• SEP IRA: up to 25% of compensation, capped at $72,000.
• Solo 401(k): $24,500 employee deferral, plus employer contributions up to the overall limit; catch-up contributions add $8,000 for those 50+ (or $11,250 for ages 60–63).
• SIMPLE IRA: $17,000 standard limit, $18,100 for certain enhanced SIMPLE plans.

If you don’t already have a plan, a SEP IRA can typically be opened as late as your tax filing deadline, including extensions, which gives you flexibility even now. A Solo 401(k), by contrast, generally has to be established by December 31 to accept contributions for 2026, even though you have until the filing deadline to actually fund it.

Watch Out: Retirement-plan deadlines depend on the type of plan and the taxpayer’s circumstances. While many 401(k) plans generally need to be established by year-end, SECURE 2.0 provides a special rule for certain sole proprietors with no employees, allowing a new 401(k) plan to be established after year-end by the individual’s tax-return due date, without extensions. Employer contributions can also have different deadlines. Don’t wait until the last minute, confirm the rules for your specific plan before year-end.

Action 3: Revisit Your QBI Eligibility

The higher 2026 thresholds mean some owners who previously lost part of their QBI deduction now qualify for the full 20%.

This especially affects owners of specified service trades or businesses (SSTBs), as well as those in law, accounting, consulting, financial services, health, and similar fields, who are typically excluded from the deduction above certain income levels.

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“For 2026, the QBI rules also provide higher income thresholds and a longer phase-in range for taxpayers whose businesses are subject to the wage/property limitations or SSTB rules. The threshold amount is $201,750 for most taxpayers and $403,500 for married couples filing jointly. The phase-in range is $75,000 for most taxpayers and $150,000 for married couples filing jointly. SSTBs, such as many businesses involving law, accounting, consulting, health, and financial services, require particular attention because the QBI deduction can be limited as taxable income increases through the applicable phase-in range and may be unavailable above the applicable range.” 

Filing status	QBI threshold	Phase-in range
Single / most other returns	$201,750	$75,000
Married filing jointly	$403,500	$150,000
Married filing separately	$201,775	$75,000

What actually works here is running the numbers before year-end, not after. If you’re close to a threshold, there may be legitimate ways to manage taxable income, retirement contributions, the timing of income and expenses, and entity structure to keep you within the full-deduction range. That’s a conversation for your tax preparer, not a DIY project; getting entity structure wrong can cost more than it saves.

Action 4: Don’t Miss the September 15 Estimated Tax Payment

If your business pays quarterly estimated taxes, the third-quarter 2026 payment is due September 15, 2026. The fourth-quarter payment is due January 15, 2027.

Underpayment penalties accrue even if you plan to pay everything at the time of filing. If your income has grown this year which it has, a stronger Q2 or Q3, a big contract, and a one-time gain, then your prior estimate may now be too low.

💡 Pro Tip: Recalculate your estimate using year-to-date actual income, not last year’s number. A five-minute update now is cheaper than a penalty in April.

Action 5: Capture the Deductions Owners Tend to Miss

A few smaller items add up more than owners expect:

• Mileage: The IRS business standard mileage rate is 76 cents per mile for July 1 through December 31, 2026. The rate was 72.5 cents per mile for the first half of the year.
• HSA contributions: if you have a high-deductible health plan, 2026 limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up at 55+.
• Employer-provided childcare credit: if you offer this benefit, the credit rose to 40% of costs (50% for eligible small businesses), with a higher annual cap.

A common mistake is claiming mileage from memory at tax time instead of keeping a running log. The IRS can disallow undocumented mileage, and reconstructing a year of trips in March rarely holds up.

Conclusion

Four moves are worth doing before December 31: finalize equipment purchases with placed-in-service dates in mind, fund or open a retirement plan, check whether the new QBI thresholds change your position, and true up your September estimated payment. The fifth, logging mileage and HSA contributions, costs nothing but a little consistency.

None of this replaces a conversation with a licensed tax professional who knows your specific numbers. But going into that conversation already knowing what changed for 2026 means you’ll spend less time explaining your situation and more time acting on it.

At The Chamberlain Accounting Firm, we regularly work with attorney trust accounts, including those of small businesses, on their taxes and bookkeeping. Contact us or call (201) 371-3344.

Disclaimer: This article provides general federal tax information and is not intended as individualized tax advice. State tax rules may differ. Please consult your tax professional regarding your specific situation.