2026 TAX TIPS

A new tip every month. Real information for real people.

Each month I post a brief tax tip on this web page covering a topic I think will be useful to my clients and to the public at large. Please remember: these tips are general information only. Your particular situation may differ. Always consult with a qualified tax professional before acting on any tax-planning idea.

— Daniel R. Jahn, C.P.A.

Don't Miss Your Q2 Estimated Tax Payment

If you are self-employed, an owner of an S-corporation taking distributions, or you have significant investment income, you almost certainly owe quarterly estimated tax payments. The next federal deadline is:

JUN 16, 2026

Missing an estimate triggers the IRS underpayment penalty — currently around 8% annualized. The fix is easy: pay either (a) 90% of your current-year tax liability across four equal estimates, or (b) 110% of last year's total tax if your prior-year AGI was over $150,000 (100% if below). Hitting the "safe harbor" is what we plan around for most clients.

S-Corp? Pay Yourself a "Reasonable" Wage

S-corporation owners often try to take everything as a distribution (no payroll tax) and nothing as a W-2 wage. The IRS calls this strategy "reasonable compensation non-compliance," and it is one of their favorite audit triggers.

The standard is: what would you have to pay an unrelated third party to do the work you do for your S-corp? Document it. Run actual payroll through Gusto or QuickBooks Payroll. The added cost is small. The risk of getting it wrong is not.

Retirement Contributions Cut Your Tax Bill

For the 2025 tax year (which you are filing right now), you can still contribute up to $7,000 to a Traditional or Roth IRA — or $8,000 if you are 50 or older — up to April 15, 2026. Self-employed? A SEP-IRA contribution can shelter up to 25% of net self-employment earnings (capped at $70,000 for 2025) and the deadline extends with your return.

Pro tip: if you have a side business and a W-2 with a 401(k), a Solo 401(k) often beats a SEP for the same dollars of income. Talk to us before December.

The Home Office Deduction (Yes, It's Still a Thing)

Self-employed and working from a dedicated space at home? You likely qualify for the home office deduction. There are two methods:

• Simplified method: $5 per square foot, up to 300 sq. ft., max deduction $1,500. Easy.
• Actual expense method: business-use percentage of rent or mortgage interest, utilities, insurance, repairs, and depreciation. More paperwork, often a much larger deduction.

Important: W-2 employees currently cannot take this deduction at the federal level, even when working from home. That's the Tax Cuts and Jobs Act at work.

Five Things to Bring to Your Tax Appointment

1. All W-2 forms from every employer in 2025.
2. All 1099 forms (NEC, MISC, INT, DIV, B, R) — even the small ones.
3. Last year's tax return, if you are a new client.
4. Records and totals for deductions you intend to claim — especially mileage logs, home office, and charitable contributions of $250+.
5. Social Security numbers and dates of birth for yourself, your spouse, and all dependents.

Self-employed? Also bring: a profit-and-loss statement (or QuickBooks access), year-end bank and credit-card statements, and a list of any equipment purchases over $2,500.

Year-End Moves Before the Ball Drops

• Defer income where you can (delay invoicing to January if you're a cash-basis business and your 2026 will be lower).
• Accelerate deductions if 2025 will be higher — prepay January's bills in December.
• Harvest investment losses to offset gains; mind the wash-sale rule.
• Make any remaining charitable contributions by December 31.
• Top up your 401(k) — the deadline is hard.
• Confirm S-corp owner payroll for the year is in line with your reasonable-comp number.

Figures are for the 2025 tax year. 2026 limits adjust for inflation. We confirm specific numbers for your return.