OBBBA 2026 Tax Planning Checklist: 12 Moves to Make Before Year-End

The One Big Beautiful Bill Act (OBBBA), signed in 2025, overhauls business tax rules with permanent bonus depreciation, restored R&E spending, and a higher SALT cap. This checklist covers the 12 most consequential planning moves to make before December 31, 2026 for SMB owners, pass-through entities, and the CPAs who serve them.

Summary Overview

•  OBBBA permanently restored 100% bonus depreciation and immediate domestic Section 174 R&E spending for tax years starting in 2025.

•  The QBI deduction is now permanent at 20% for qualifying pass-through income no more sunset.

•  The 1099-K reporting threshold reverts to $20,000 in gross payments plus 200 transactions.

•  The SALT cap rises to $40,400 for 2026, but state PTE elections may still produce a better federal outcome.

•  Use this 12-step checklist to run through before December 31, 2026.

What actually changed under OBBBA?

OBBBA is one of the biggest business-tax rewrites since the Tax Cuts and Jobs Act. The short version: several favorable provisions that were sunsetting (or already reversed) are now permanent, and a few smaller thresholds shift. Five moves matter most for 2026 planning:

• 100% bonus depreciation is back and permanent (IRC §168(k)).

• Section 174 R&E immediate expensing restored for domestic research spending; transition rules cover 2022–2024 amortization.

• QBI deduction stays at 20% for qualifying pass-through income, no more sunset (IRC §199A).

• SALT cap raised to $40,000 for 2026 (IRC §164(b)(6)).

• 1099-K threshold reverts to $20,000 in gross payments AND 200 transactions.

The 12-move year-end checklist

Here's the planning sequence to run before December 31, 2026. Numbers 1-4 have the biggest dollar impact; 5-12 are the guardrails that keep your return audit-defensible.

1. Run a bonus-depreciation purchase test. If you're planning equipment or fixed-asset purchases in Q1 2027, modeling whether accelerating into 2026 saves more tax than the cost of capital. Most tangible property with a recovery period under 20 years qualifies.

2. Reclassify capitalized R&E from 2022–2024. OBBBA's transition rules let you accelerate remaining unamortized R&E over one or two years. For many businesses, the accelerated deduction is worth filing a change in accounting method.

3. Re-run your S-corp election math. With permanent QBI and a higher SALT cap, the profitability threshold where an S-Corp beats an LLC has shifted. If you last modeled this in 2023, model it again.

4. Maximize the QBI deduction with a PTE election. Most states allow a Pass-Through Entity Tax election that lets your S-Corp or partnership deduct state taxes federally; routing around the SALT cap. Check your state's deadline.

5. Front-load deductible expenses. If cash flow allows, prepay January and February 2027 recurring expenses (rent, insurance, professional fees) in December 2026 to pull the deduction forward.

6. Defer income only if marginal rates will rise. The old "defer to next year" reflex only works if your 2027 marginal rate will be equal or lower. Run the projection first.

7. Refile prior-year returns affected by Section 174. Businesses that capitalized R&E in 2022-2024 may benefit from filing amended returns under OBBBA's transition rules. Coordinate with your CPA before November 30 so paperwork lands before year-end.

8. Reconcile 1099-K reports. The reverted threshold means payment processors are recalibrating for 2026. Match your platform reports (Stripe, Square, PayPal) against your books to catch discrepancies before January.

9. Adopt or amend an Accountable Plan. If you reimburse yourself for business expenses paid personally, an Accountable Plan converts those reimbursements to tax-free payments. Adopt before December 31 to cover 2026 activity.

10. Document substantiation before the year ends. Vehicle logs, home-office square footage, receipts for large deductions build the file before December 31, not after an IRS notice arrives.

11. Verify worker classification (1099 vs W-2) before December 31. The deadline to finish filing is January 31st. Every 1099-NEC you send is a compliance decision. Confirm you passed the "control" and "ABC" tests for each contractor misclassification, penalties compound quickly.

12. Schedule your 2027 tax planning meeting. The most valuable OBBBA move is proactive planning, not reactive filing. Book time with your CPA now to model 2027 estimated payments and Q1 moves.

Does OBBBA affect S corporations?

Yes, and materially. Permanent QBI means S-corp owners with qualifying income keep the full 20% deduction on pass-through income. Combined with a state PTE election, the effective federal-plus-state tax picture often improves enough to revisit whether your reasonable-compensation level still makes sense. Revisit owner salary before year-end.

Is Section 174 R&E spending really back?

Yes. OBBBA repealed the TCJA's mandatory 5-year amortization rule for domestic R&E expenditures for tax years starting in 2025. Foreign R&E is still amortized over 15 years. Transition rules also let taxpayers accelerate remaining unamortized 2022-2024 R&E check with your CPA whether accelerating over one year or two produces a better outcome.

What to do next

OBBBA is a tailwind, not a magic wand. The businesses that will capture the most benefit are the ones that model each move against their actual books before December 31.

If you'd like a second set of eyes on your 2026 plan, our tax specialists can walk through your checklist and flag anything worth deeper analysis.