General information only. Not tax, legal or investment advice. A planning idea named here is not a recommendation for any person. Prem Tax and Accounting Corp is a CPA firm, not a law firm. Tax rules change often and figures are for the tax year shown: confirm with the official source or a qualified adviser before you act. Read the full notice. Book a 10-minute call.

Current Topics

Business owners: equipment, entity tax and estimated taxes for 2026

Most 2026 business deductions need something to happen by December 31, 2026. We cover equipment, the Illinois entity tax, retirement plans, 1099s and the estimated tax payment due January 15.

Prepared by Prem Tax and Accounting Corp. Last reviewed November 6, 2026. Figures as of November 6, 2026.

If you own a small business, most 2026 deductions need an event inside the year: a payment made, or equipment ready for use, by Thursday, December 31, 2026. We walk the list with the Shop-Door Sign-Off, then cover estimated taxes. See also our pass-through guides.

The short version

100 percent bonus depreciation is permanent for property acquired after January 19, 2025. Section 179 allows up to $2,560,000 for 2026.
The 20 percent Section 199A deduction is permanent. The 2026 threshold is $403,500 joint, $201,750 single.
The Illinois entity tax election, at 4.95 percent, no longer ends after 2025.
Estimates avoid a penalty at the smaller of 90 percent of 2026 tax or 100 percent of 2025 tax (110 percent for higher earners), paid on time.

Moves that need an event in 2026

Move	The 2026 rule	Source
Equipment	Has to be placed in service (ready for use) by December 31. Buying it is not enough	Public Law 119-21, sec. 70301
Pass-through entity (PTE) tax	A cash-basis entity deducts state tax in the year it pays, so pay by December 31. Illinois' fourth estimate (over $500 expected) is due December 15	Notice 2020-75; Illinois Department of Revenue
Retirement plan	A new plan adopted by the extended return date can count for 2026 employer money	IRS 401(k) snapshot
Forms 1099	The 1099-NEC and 1099-MISC threshold is $2,000 for most 2026 payments. Form 1099-NEC and W-2s are due February 1, 2027	Public Law 119-21, sec. 70433
S corporation pay	Working owners need reasonable wages before distributions	IRS

Estimated taxes and withholding

The IRS figures the penalty for each due date separately. The 100 percent test becomes 110 percent if your 2025 adjusted gross income topped $150,000. Withholding counts as paid in equal parts on each due date unless you show actual dates, so extra December withholding can fix an earlier shortfall. An estimated payment counts only from the day you send it.

An invented example. Lee's 2025 tax was $60,000 on income above $150,000, and Lee expects $80,000 for 2026. Ninety percent of $80,000 is $72,000, and 110 percent of $60,000 is $66,000. The smaller one rules: $16,500 a quarter. Withholding of $10,000 a quarter is $6,500 short each time, $26,000 in all. Another $26,000 withheld from December pay counts as $6,500 per due date.

The Shop-Door Sign-Off

Equipment: list each asset with its in-service date.
Entity tax: decide on the PTE election, and pay by December 31 if you elect.
Forms: check names and tax IDs. The IRS's FIRE e-file system closes November 19, 2026; e-filed 2026 forms go through IRIS.
Retirement: set up or add to a plan, and date the paperwork.
Estimates: compare payments with the no-penalty level before January 15.

Common questions

Is 100 percent bonus depreciation permanent?

For property acquired after January 19, 2025, the law has no end date. The asset still has to be in service in the year you claim it. Illinois adds the bonus back and lets you recover it later on Form IL-4562.

Can I set up a retirement plan after the year ends?

Employer money can count for 2026 if the plan is adopted by the return due date, with extensions. Your own deferrals need a plan first, except for an unincorporated sole owner with no employees, who has until April 15, 2027.

Does the entity tax help with the SALT cap?

Under IRS Notice 2020-75 the entity deducts the tax, and it is not counted against an owner's cap. No regulations have been issued. Ask your adviser.

Official sources

Keep reading

Please read: general information only

This page gives general information and education about current federal and state tax topics, including recent legislation, planning ideas, retirement and annuity rules, and court decisions. It is not tax, legal, accounting, investment, insurance or other professional advice, and it is not a substitute for advice from a qualified CPA, attorney or other adviser who knows your facts. Reading it does not create a CPA-client or any other professional relationship with Prem Tax and Accounting Corp. Prem Tax and Accounting Corp is a CPA firm, not a law firm. It does not sell insurance or investment products, and it does not recommend, rate or sell any annuity, fund or other product. A planning idea, a strategy name or an example here is not a recommendation to take or avoid any action.

Tax rules, thresholds, rates and deadlines change often, and Congress, the IRS, the courts and the states change how they apply them. Guidance on recent legislation is still being issued. We checked the figures against the official sources named on the page on the date shown (last reviewed November 6, 2026), but we do not promise that this page is complete, current or free of errors, and we do not update it the moment a rule changes. Where the rules are unsettled or guidance is still pending we say so. Amounts for a future year are labelled planning figures until the IRS or another agency publishes them. Examples use invented numbers and are for illustration only.

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Questions about how the new tax law or your year-end moves apply to you? Keshav Agrawal is a U.S. CPA and a Chartered Accountant (CA) from India. We prepare U.S. and Illinois returns, plan with you, and work alongside your financial adviser, insurance agent or attorney. We sell no investment or insurance products. Book a 10-minute call or send us a message.

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