Act by Dec 31
Track every business write-off
Software, phone, internet, supplies, travel, and half of business meals all reduce income tax and self-employment tax.
- Who it’s for
- Anyone with 1099, freelance, or business income
- 2026 limit
- No cap — must be ordinary and necessary business expenses
- Deadline
- Spend by Dec 31 to deduct in 2026
Example: A rideshare driver who logs $6,200 of missed expenses saves about $2,100 in income and self-employment tax.
New for 2026
Qualified business income (QBI) deduction
If you freelance or own a business, you may be able to deduct up to 20% of your profit. This deduction is now permanent.
- Who it’s for
- Sole proprietors, LLC members, S corp owners, and some landlords
- 2026 limit
- 20% of qualified business income. Higher earners face wage and property limits, and some service businesses can lose it entirely.
- Deadline
- Claim it on your 2026 tax return.
Example: $80,000 of freelance profit can mean a deduction of roughly $12,000–$15,000.
Best with a tax pro
Elect S corp tax status for your LLC
By default, most of your LLC’s profit is subject to the 15.3% self-employment tax. Elect S corp status and you pay that tax only on the salary you pay yourself — the rest of your profit comes out as distributions, which aren’t subject to it.
- Who it’s for
- Profitable LLCs (or sole proprietors who form one), usually once profit runs well past a reasonable salary
- 2026 limit
- Savings depend on profit vs. salary; payroll and filing costs apply
- Deadline
- Form 2553 by March 15, 2027 to take effect for 2027
Example: $140,000 of profit with a $70,000 salary avoids about $9,000 in payroll tax on the distributions.
Self-employed health insurance deduction
Deduct 100% of health, dental, and long-term care premiums for you and your family. You get it on top of the standard deduction, so you don’t need to itemize (list out your deductions one by one) to claim it.
- Who it’s for
- Self-employed people who can’t get a subsidized plan through their own or their spouse’s employer
- 2026 limit
- Up to your business profit, after the self-employment tax and retirement deductions
- Deadline
- Premiums paid in 2026
Example: A family paying $1,100 a month in premiums deducts $13,200.
Home office deduction
If part of your home is used only for work, you can deduct a share of your rent or mortgage interest, utilities, and insurance.
- Who it’s for
- Self-employed people and LLC owners with a dedicated workspace at home (W-2 employees can’t claim it; S corp owners use an accountable plan)
- 2026 limit
- Simplified: $5 per sq ft up to 300 sq ft ($1,500). Actual method: up to your business income, with the rest carried forward
- Deadline
- Claim it on your 2026 tax return.
Example: A 180 sq ft office in a 1,200 sq ft apartment at $2,400 rent = $4,320 under the actual method.
New in 2025Act by Dec 31
100% bonus depreciation & Section 179
Normally you deduct the cost of business equipment a little at a time over several years. Now you can deduct the full cost of things like computers, cameras, and work vehicles in the year you buy them.
- Who it’s for
- Businesses buying equipment placed in service in 2026
- 2026 limit
- Bonus depreciation: 100%, no cap. Section 179: $2,560,000 for 2026. Passenger cars have their own lower limits.
- Deadline
- Placed in service by Dec 31, 2026
Example: A videographer buys a $9,000 camera kit in December and deducts it all on the 2026 return.
Act by Dec 31Best with a tax pro
Right-size your S corp salary
As an S corp owner, you have to pay yourself a fair salary for the work you do. Set it too low and the IRS can push back; set it too high and you lose the tax savings that made the S corp worth it.
- Who it’s for
- S corp owners who work in the business
- 2026 limit
- What you’d pay someone else to do your job. It also sets the base for your employer 401(k) contributions and your QBI wage limit.
- Deadline
- Adjust payroll before your last 2026 pay run
Example: An owner paying themself $40,000 on $180,000 of profit raises it to $75,000 to fit the role — and still saves about $14,000 in payroll tax.
Act by Dec 31Best with a tax pro
Reimburse yourself through an accountable plan
S corp owners can’t deduct their home office or phone the usual way. Instead, your company can pay you back for those costs — the company deducts them, and you don’t pay tax on the money.
- Who it’s for
- S corp owners who use their home, phone, or car for the business
- 2026 limit
- Actual documented costs, submitted within a reasonable time
- Deadline
- Adopt the plan and reimburse by Dec 31
Example: An S corp reimburses its owner $6,400 for a home office, phone, and mileage — deductible to the company, tax-free to them.
Act by Dec 31Best with a tax pro
Hire your kids
Pay your kids a fair wage for real work in your business. You deduct what you pay them, and they can earn up to $16,100 a year without owing income tax.
- Who it’s for
- Sole proprietors, single-member LLCs, and partnerships owned only by the parents (no payroll tax on kids under 18); S corps must run them through payroll
- 2026 limit
- Reasonable pay for real work; $16,100 tax-free to the child in 2026
- Deadline
- Wages paid by Dec 31
Example: Paying a 15-year-old $12,000 for social media work saves a parent in the 24% bracket about $4,400.
Act by Dec 31Best with a tax pro
The Augusta rule
If you rent out your home for 14 days or fewer a year, you don’t pay tax on that rent. Business owners can use this rule to rent their home to their own company for meetings.
- Who it’s for
- Homeowners; owners of an S corp, C corp, or partnership renting their home to the business for real meetings at market rates
- 2026 limit
- 14 days a year at a documented fair-market rate
- Deadline
- Meetings held by Dec 31
Example: An S corp holds 6 quarterly-planning days at $800/day: $4,800 deducted by the business, tax-free to the owner.
Act by Dec 31Best with a tax pro
Pass-through entity tax (PTET) election
In many states, your partnership or S corp can pay your state income tax for you. The business deducts it, which gets around the $40,400 limit on deducting state taxes yourself.
- Who it’s for
- Owners of partnerships and S corps in states that offer a PTET
- 2026 limit
- Set by your state
- Deadline
- Varies by state; many require payment by Dec 31
Example: An S corp owner in New York pays $30,000 of state tax on the business’s income through the S corp, which deducts it in full.
