All Things Tax: What Business Owners Need to Know in 2026

Tax season arrives every year, but 2026 brings a unique wave of changes, questions, and opportunities for business owners. In a recent episode of Profitability Playbook: The Simple Numbers Podcast, host Mike Maxson sat down with Carr, Riggs & Ingram (CRI) tax partner Raegan Glaze to unpack the most common issues, misconceptions, and strategies shaping today’s tax landscape.

From the impact of new legislation to myths circulating online, the conversation offered clarity on what business owners should truly focus on to stay compliant and position themselves for long-term success.

The New Tax Landscape: Certainty After Years of Question Marks

Before the One Big Beautiful Bill Act (OBBBA) passed in July 2025, many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) were set to expire. That meant countless business owners were bracing for higher tax rates, smaller standard deductions, the return of personal exemptions, and the loss of popular incentives.

OBBBA brought stability back to tax planning by making several key TCJA elements permanent or expanding them. This includes lower tax rates, wider tax brackets, and the Qualified Business Income (QBI) deduction.

What Tax Strategy Really Means

Many business owners say they want tax strategy but expect something that looks more like a loophole than a plan. In reality, effective tax strategy is long-term, built on consistent communication with a trusted advisor, focused on structural choices, and centered around planning rather than reacting.

Good tax strategy comes from engaging your CPA throughout the year, not handing over documents in March or April and hoping for miracles. Reagan states, “If we haven’t talked all year, there’s not much I can do for you in April.”

Quarterly Estimates: Why They Matter More Than Ever

IRS penalties for underpaying estimated taxes have increased, making timely quarter payments a necessity. Business owners generally have two ways to avoid penalties:

1. Pay 90 percent of current-year tax liability, based on best-available projections each quarter.

2. Pay 100 percent of the prior year’s tax liability, a simpler and safer option for growing businesses.

For many small businesses, using the 110 percent safe harbor provides predictable expectations and less stress.

Choosing the Right Entity: Don’t Rush the S Corp

Entity structure is one of the most important decisions a small business can make. Reagan’s general rule of thumb is to start as a single-member LLC. It is flexible, easy to modify, and avoids premature administrative burden.

The most common mistake? Electing S corporation status too early. While S corporations can offer legitimate payroll tax savings, they also come with additional tax filings, required payroll for owners, and ongoing administrative costs. If a business isn’t generating enough profit, the added complexity often outweighs the benefit.

Cash vs. Accrual: Which Method Should You Use?

While many businesses can use the cash basis method for tax purposes, accrual financial statements often provide better visibility into accounts receivable, accounts payable, and overall operational health.

Here’s the practical reality:

• You may track your books on an accrual basis for management and decision-making.

• Your CPA may convert you to cash for tax reporting.

But that means your tax return won’t mirror your financial statements exactly, so understanding the conversion is essential.

Businesses exceeding an average of $31 million in gross receipts across three years must use accrual, but most small businesses remain eligible for cash basis reporting.

Debunking Common Tax Myths

Here are some widespread misconceptions:

1. "Buying equipment at year-end saves me taxes.” This is technically true, but not always the smartest move. If you spend a dollar to save thirty cents, you’re still out seventy cents. Buying equipment you don’t need is never a good tax strategy.
   

2. “I should always take Section 179 or bonus depreciation.” These tools are powerful, but not always appropriate. Immediate expensing wipes out future deductions. If next year’s profit will be dramatically higher, deferring depreciation may make more sense.
   

3. “Retirement contributions are tax-free.” They are tax-deferred, not tax-free, unless it’s a Roth account and the rules are met. Traditional 401(k) and IRA contributions reduce income now but are taxable later when withdrawn.
   

4. “Depreciation on real estate means I’ll never pay tax.” Not true for most people.
   

5. “I can run all my personal expenses through the business.” This can be a dangerous assumption. While some mixed-use items (like a phone) may be partially deductible, vacations, spa services, and personal lifestyle costs are not. Misclassification risks penalties and unwanted IRS attention.

Deferring Income: A Tool With Limits

Some business owners consider delaying invoicing until January to reduce December taxable income. While that can work under specific circumstances, it’s not always advisable. Cash-flow realities, customer preferences, and accounting method limitations must all be considered.

The Best Tax Advice for Any Business Owner

Reagan closed the episode with simple but important guidance:

• Don’t be afraid of taxes.

• Don’t do it alone.

• Work with a CPA you trust and can talk to.

Trying to navigate taxes without guidance often leads to avoidable mistakes, missed opportunities, and unnecessary anxiety. The best time to seek advice is before making major financial or structural decisions, not after.

Final Thoughts

Taxes are complex, but they don’t have to be overwhelming. With year-round communication, thoughtful planning, and a focus on long-term financial health rather than short-term “wins,” business owners can position themselves for sustained profitability and fewer unpleasant surprises.

If you’re looking to build a stronger financial foundation for your business, contact us to get started.