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The team at SWC simplifies complex tax issues, helps you build and leverage your wealth to enhance your personal and financial freedom, and offers unparalleled peace of mind at every step along the way.

8 Year-End Tax-Saving Strategies for Business Owners in 2026

By |2026-10-27T16:13:26-07:00October 27, 2026|Categories: Business Taxes|Tags: , , , |0 Comments

If you own or manage a business, you’re probably spending time thinking about taxes, especially as the end of the year approaches. With 2026 drawing to a close, now is a good time to review your business finances with your CPA and consider opportunities to reduce your federal income tax liability before Dec. 31, 2026.

The One Big Beautiful Bill Act (H.R. 1) — see “What the Passage of the One Big Beautiful Bill Mean for You and Your Business” here on the SWC Blog — extended several business-friendly tax provisions and expanded others. Signed into law in July 2025, these changes create opportunities to reduce taxable business income and make decisions that may benefit your business.

Here at SWC, we hate to see business owners pay more in taxes than they’re legally obligated to. That’s why we encourage our clients to schedule year-end tax projection appointments while there’s still time to make adjustments that could reduce their 2026 tax bills.

In our recently published post, “2026 Year-End Tax Checklist: 12 Ways to Save Before December 31,” we covered tax-saving strategies for individual taxpayers. In this post, we’re focusing on eight opportunities specifically for business owners and those who manage businesses, starting with retirement plan considerations.

Tip No. 1: Establish a Retirement Plan or Increase Your Contributions

If your business doesn’t already offer a retirement plan, establishing one may be among the most effective ways to reduce taxable income while helping you and your employees save for retirement. Several retirement plan options are available to businesses, and the best choice depends on your business structure and the number of employees you have.

Here are three common choices: Continue reading… Continue reading… Continue reading…

New IRS Per Diem Rates for 2026-2027: What Business Owners Should Know

By |2026-10-20T15:41:08-07:00October 20, 2026|Categories: Business Expense|Tags: |0 Comments

Business travel has returned to many companies’ schedules in the years since the health pandemic. Meanwhile, stories about flight delays and cancellations continue to remind travelers that getting from one place to another can be an adventure, if not downright challenging.

There is some welcome news on the expense side of business travel. The Internal Revenue Service (IRS) has released updated per diem rates for 2026-2027, giving businesses new standardized amounts to use when reimbursing employees for qualifying travel expenses.

Image of business owner with an iPhone in their hand taking a picture of a receipt with the word "New IRS Per Diem Rates for 2026-2027: What Business Owners Should Know" across the image.

The new rates took effect Oct. 1, 2026, and apply to travel expenses incurred while business owners and employees are away from their tax homes on business. For companies that regularly send employees to conferences, trade shows, client meetings, off-site training, or other business destinations, the update provides an opportunity to review travel reimbursement policies and simplify expense reporting.

What Are Per Diem Rates?

A per diem is a daily allowance used to cover certain expenses while traveling for business. Employers can use IRS-approved substantiation methods to reimburse employees for qualifying lodging costs and meals without requiring receipts for every expense covered by the allowance.

The IRS updates its special per diem rates annually to account for changes in travel costs. Under the applicable rules, businesses can use these rates to determine how much of an employee’s travel allowance is treated as substantiated for federal tax-related purposes.

For employers, a properly administered per diem arrangement can make expense reporting easier. Employees still need to document when and where they traveled, along with the business purpose of each trip, but the standardized allowance can reduce the need to collect individual receipts for expenses covered by the applicable per diem method.

The New Per Diem Rates for 2026-2027

IRS Notice 2026-60 (PDF file) establishes the following special per diem rates for the period beginning Oct. 1, 2026: Continue reading… Continue reading… Continue reading…

California Tax and Business Updates to Have on Your Radar for 2027

By |2026-10-09T13:53:55-07:00October 9, 2026|Categories: Business Taxes, California Tax Planning|Tags: , , |0 Comments
Start Here: As 2027 approaches, California taxpayers and business owners have several changes worth knowing about. New sales tax rules for digital products, a higher statewide minimum wage, updated business filing procedures, and other developments could affect the decisions you make before and after year-end.

Keeping up with California tax law can feel like a full-time job. Fortunately, most taxpayers do not need to follow every bill, court decision, or administrative update coming out of Sacramento. What matters is knowing when a change could affect your business, your tax return, your real property, or a financial decision you’re preparing to make.

With year-end tax planning underway here at SWC, we have narrowed the field to several California-related developments we believe are worth having on your radar as we head into 2027, starting with how the state is gearing up to handle sales tax on certain digital products.

 

California Is Expanding Sales Tax to Digital Products

One of the biggest changes for California businesses arrives Jan. 1, 2027. Beginning on that date, the Golden State’s sales and use tax will apply to retail sales of digital products sold in the state or purchased for use in the state. The new rules can apply whether the product is delivered on physical media and transferred electronically, or even accessed remotely.

That last category is particularly important for businesses, because the change reaches many products companies routinely purchase without thinking of them as tangible property, including certain prewritten software and software-as-a-service, commonly known as SaaS. The change could affect several parts of a business’s software purchasing process, including contracts, purchasing procedures, recordkeeping, and documentation showing where digital products are used.

What If Your Business Operates In More Than One State?

Things become even more complicated when a digital product is used by employees or other users both inside and outside California. CDTFA (California’s Department of Tax and Fee Administration) has been developing regulations addressing digital products purchased for use in multiple locations, along with rules covering sourcing, certain tax-liability thresholds, custom software, and other aspects of the new law.

The distinction between the law and those implementation rules isn’t trivial. With the state’s expansion of sales and use tax to digital products taking effect at the beginning of the year, some of the administrative details surrounding how the tax will operate are still being developed.

What You Should Do: If your business makes significant purchases of software, SaaS, cloud services, or other digital products, now is a good time to review those agreements. Businesses operating in multiple states should also consider whether their records adequately show where their digital products are actually being used.

California’s Minimum Wage Is Going Up

Beginning Jan. 1, 2027, California’s statewide minimum wage increases from Continue reading… Continue reading… Continue reading…

Why a Year-End Tax Projection Can Be One of Your Most Useful Planning Tools

By |2026-10-08T15:25:14-07:00October 1, 2026|Categories: Tax Planning|Tags: |0 Comments

In the final months of the year, you probably know much more about your financial picture than you did back in January. Your income is taking shape, business results are clearer, investment gains and losses have accumulated. Maybe a property has been bought or sold, or you have retired, changed jobs, relocated, welcomed a new family member, or experienced another financial change.

Bottom line: Your tax picture has likely been changing, and that’s what makes the dozen or so weeks leading up to Dec. 31 particularly useful for tax planning. Instead of waiting until your tax return is prepared to find out where you stand, a year-end tax projection provides an earlier look at your expected tax liability and helps identify issues or planning opportunities while the tax year is still open.

Tax Preparation Looks Back, A Tax Projection Looks Ahead

Tax return preparation and tax projections serve different purposes. When your tax return is prepared, the year has already ended. Most of the income has been earned, transactions have occurred, and end-of-year deadlines have passed. The job at that point is largely to determine how the tax rules apply to what happened during the previous year.

A year-end tax projection happens earlier. It uses information available now, together with reasonable estimates for the remainder of the year, to develop a working picture of your expected tax position. That distinction helps because knowing about a potential issue before year-end may give us time to help you evaluate your options. Discovering the same issue during tax season may simply tell you what already happened.

A Lot About Your Finances Can Change in a Year

Your prior-year tax return provides useful information, but it does not necessarily predict what will happen this year. Consider what may have changed since your last return.

Perhaps you started a new job, received a raise, accepted a bonus, or benefited from another form of compensation. You might have started or sold a business, experienced a substantial change in business income, sold real estate, or received income from a new source. Your investment portfolio, including any cryptocurrency you possess, may have generated significant gains or losses. Retirement even could have changed the Continue reading… Continue reading… Continue reading…

Cybersecurity Awareness Month: Timely Tips to Protect You and Your Business

By |2026-10-08T15:31:32-07:00September 26, 2026|Categories: Fraud Prevention|Tags: , , |0 Comments

Think about all the sensitive information that passes through your computer or phone every single day. You might check your bank account, open an investment statement, send a tax document, approve a payment, access payroll information, make a purchase, or receive an email from someone who appears to be a customer or vendor.

Each interaction creates another reason to pay attention to cybersecurity.

October is Cybersecurity Awareness Month, an annual campaign led by the Cybersecurity and Infrastructure Security Agency (CISA). For 2026, the theme is “Securing the Next 250,” recognizing the nation’s 250th anniversary and encouraging individuals and organizations to take practical steps that support a safer digital future.

For individuals, cybersecurity often starts with protecting the accounts and devices that contain personal and financial information. Businesses face those same concerns while also managing employee access, customer and vendor information, business systems, and the ability to continue operating after a disruption. Cybersecurity Awareness Month provides a good reason to review both.

For Individuals: Make Your Accounts Harder to Compromise

Many cybersecurity precautions begin with something familiar: the accounts you use every day. Your email account deserves particular attention because it often connects to other services. Password-reset messages, financial notifications, tax correspondence, and account verification requests may all arrive there. Someone who gains access to your email may be able to use that access in attempts to compromise other accounts.

Start by reviewing the accounts that contain sensitive information or provide access to it. These may include email, banking, investment, accounting, tax, shopping, and social media accounts.

Use Unique Passwords and a Password Manager

Reusing the same password across several accounts creates unnecessary exposure. If someone obtains that password from one compromised account, they can try the same credentials elsewhere. Even worse? They can sell your information to the highest bidder through the dark web.

CISA and the National Institute of Standards and Technology (NIST) recommend password management tools such as Continue reading… Continue reading… Continue reading…

Two Tax Developments Worth Knowing: Crypto Staking Rewards and a New Credit for Beauty Businesses

By |2026-10-08T15:35:35-07:00September 18, 2026|Categories: Cryptocurrency, Legislation|Tags: , , , |0 Comments

Tax developments don’t always arrive neatly packaged around a single industry or type of taxpayer. Two recent changes speak exactly to that point. A new U.S. Tax Court decision addresses when cryptocurrency staking rewards become taxable, while an expansion of an existing tax credit could reduce income taxes for eligible salon, spa, barbershop, and other beauty industry employers.

Here’s what affected taxpayers need to know, starting with cryptocurrency staking rewards.

Receiving Crypto Staking Rewards? The Tax Timing Just Got Clearer

Some cryptocurrency owners can commit their tokens to help support the process a blockchain uses to validate transactions. In return for participating, they may receive additional cryptocurrency tokens as rewards. This process is known as “staking.”

If you receive those staking rewards, an important tax question follows: When do the new tokens become taxable? Is it when they arrive in your account, or when you eventually sell them for cash?

A June 2026 U.S. Tax Court decision provides an answer under the circumstances presented in the case. In Paschall v. Commissioner (PDF file), the Tax Court held that a cash-method taxpayer had to include cryptocurrency staking rewards in gross income when the taxpayer received the rewards and gained “dominion and control” over them.

For taxpayers who participate in cryptocurrency staking, that distinction has a practical consequence. Receiving cryptocurrency can create taxable income, even when you haven’t sold the tokens for dollars.

What Happened in the Paschall Case?

In Paschall v. Commissioner, Alvie and Patricia Paschall held a cryptocurrency named Cardano through an account that Mr. Paschall controlled with an electronic trading platform named eToro. The platform automatically enrolled its customers who held Cardano in its staking service, although they could opt out. The Paschalls stayed enrolled throughout 2021.

Each month, eToro added new Cardano tokens to Mr. Paschall’s account as staking rewards. Once those tokens reached the account, the Paschalls could keep them, transfer them elsewhere, or sell them for cash.

The IRS said the Paschalls should have reported $33,354 in staking rewards as income for 2021. They disagreed, leaving the Tax Court to decide when the rewards became taxable: when the tokens were received or when they were eventually sold.

Why “Dominion and Control” Matters

For cash-method taxpayers, income is typically reported in the earliest year in which it is actually or constructively received. With cryptocurrency, the ability to control the asset plays an important role in determining when that occurs.

The Tax Court in Paschall v. Commissioner found that the Paschalls had dominion and control over the Cardano staking rewards when they were received (i.e., they could access the tokens and sell them for cash without restriction). The rewards also increased both the Paschalls’ proportionate interest in the cryptocurrency and the value of that interest.

The Paschalls argued that tokens created through staking amounted to Continue reading… Continue reading… Continue reading…

Qualified Small Business Stock: A Tax-Saving Opportunity for Business Owners and Investors

By |2026-09-11T12:57:05-07:00September 11, 2026|Categories: Business Advice, Business Taxes|Tags: , , |0 Comments

Suppose you started a company with relatively little capital, built it over several years, benefit from a stellar reputation both on- and off-line, and now have a buyer interested in buying the business.

Now, if the value of your shares in the business has grown substantially, a sale could produce a sizable taxable gain. But your federal tax bill could look very different if those shares qualify as qualified small business stock (QSBS).

Section 1202 of the Internal Revenue Code allows eligible shareholders to exclude some or all of the gain from the sale of qualifying stock from federal taxable income, subject to specific requirements and limitations. And recent changes expanded those benefits for stock acquired after July 4, 2025, including potential exclusions after shorter holding periods.

For someone forming or investing in a growing company, those rules can influence decisions being made long before anyone talks about selling or acquiring the business. The choice of business entity, the timing of a stock issuance, changes in ownership, and even the company’s growth, can affect whether a future sale qualifies for favorable QSBS treatment.

In this SWC blog post, we cover what you need to know to take advantage of the benefits offered by the Internal Revenue Code (IRC), starting with how an ownership stake qualifies as qualified small business stock.

How Does Stock Qualify as QSBS?

Qualified small business stock (QSBS) treatment starts with the company that issues the shares. Generally, the company must operate as a domestic C corporation, and the shareholder must acquire the stock at original issuance in exchange for money, certain property, or services. The person claiming the exclusion must also qualify as a noncorporate taxpayer.

Timing Matters: The size of the company at the time it issues the stock plays an important role. For stock issued on or before July 4, 2025, the corporation generally must have aggregate gross assets of $50 million or less before and immediately after the stock issuance. For stock issued after July 4, 2025, the limit rises to $75 million.

The higher threshold could matter to a growing company considering whether and when to issue shares. A business that falls below the limit today could grow beyond it later, potentially changing the QSBS analysis for future stock issuances.

The corporation’s activities also have to qualify. During substantially all of the shareholder’s holding period, at least 80 percent of the corporation’s assets, measured by value, generally must support the active conduct of one or more qualified trades or businesses.

Section 1202 of the IRC excludes certain types of businesses. Among them are: Continue reading… Continue reading… Continue reading…

IRS Dirty Dozen for 2026: 12 Tax Scams to Watch Out For

By |2026-09-02T11:46:04-07:00September 2, 2026|Categories: Fraud Prevention|Tags: , , , |0 Comments

Scammers and bad faith actors are always looking for ways to separate you from your hard earned money, personal information, real property, and identity. And when one scam stops working, they rarely pack up and find a new line of work.

That’s one reason that the Internal Revenue Service (IRS) publishes its annual Dirty Dozen, a list of tax scams and schemes that taxpayers, businesses, nonprofits, and even tax professionals like the team here at SWC, should watch out for. The 2026 list covers familiar threats and reflects how fraud is changing, with AI-enabled scams and other increasingly sophisticated attempts to steal from you.

The IRS issued its initial Dirty Dozen alert in January of 2002 and now, as part of a partnership with state tax agencies and the tax industry, continues to warn business and individual tax filers about the ever-evolving nature of tax scams and schemes. Although such deceptions often receive more attention in the spring when we’re fully engaged in tax filing season, we encourage our clients to remain cautious throughout the year.

In this post, we bring you up to speed on the 12 scams and schemes on the IRS Dirty Dozen list for 2026, explain the warning signs, and offer practical guidance for protecting yourself and your business. We’ll start with the fraudsters who impersonate the IRS using Artificial Intelligence.

1. AI-Enabled IRS Impersonation by Phone

Artificial intelligence is giving an old scam some new tricks. Fraudsters can now use computer-generated tactics, voice mimicry, and spoofed caller ID to make a phone call sound and appear more convincing. A call may look as though it’s coming from a legitimate source and may use urgency or threats to pressure you into responding.

The IRS points out several important warning signs:

  • It generally contacts taxpayers by mail first.
  • It doesn’t leave urgent phone messages.
  • It doesn’t leave threatening prerecorded messages.
  • It doesn’t call to demand immediate payment or threaten taxpayers with arrest.

Caller ID isn’t proof of identity, as today’s technology can make a fraudulent call appear to come from a legitimate source.

What to do: If you receive a suspicious IRS-related call, hang up rather than providing information or making a payment.

Related: We here at SWC — as well as officials at the IRS — caution taxpayers against relying on AI-generated responses for complicated tax questions. Any tax information or calculations produced by AI should be verified by a CPA.

2. IRS Impersonation by Email and Text

Phishing emails have been around for years, but scammers continue to find new ways to make them convincing. They may send an email, text, or direct message (DM) through a social media platform that appears to come from the IRS and use alarming language to convince you to act quickly.

Some messages contain links or QR codes that send you to fake IRS websites, where you’re asked to Continue reading… Continue reading… Continue reading…

Section 168(k) and Motion Picture Film Investments: When Your Investment Gets a Screen Credit

By |2026-08-27T12:45:38-07:00August 27, 2026|Categories: Tax Strategy|Tags: , , , |0 Comments
Start Here: A provision of the federal tax code better known for equipment purchases and other business property can also apply to qualified motion picture productions. Under current federal law, Section 168(k) of the Internal Revenue Code provides 100 percent bonus depreciation for qualified property acquired after Jan. 19, 2025, subject to applicable requirements. Congress includes certain qualified film and television productions within that provision. For investors participating through a pass-through structure, depreciation claimed by the entity may result in losses allocated to them. The amount an investor can actually deduct depends on the investment structure and that investor’s tax circumstances. Here, we explain how the opportunity works, when a film qualifies, why release timing deserves attention, and what to examine before investing.

Imagine sitting at home on Oscar night as the final award is announced. The winning film’s actors begin making their way to the stage. The director follows, along with producers and other members of the cast and crew. While the director accepts the award and the lead actor smiles for the cameras, you spot a guy standing near the edge of the group who looks surprisingly familiar.

It takes you a moment to place him. Then you remember. You were paired together in a foursome at a charity golf tournament a few years ago. You spent most of an afternoon together, talked between shots, had dinner and drinks afterwards, and haven’t seen or spoken with him since. As far as you knew, he had nothing to do with the movie business. Yet there he stands among the people celebrating the biggest award of the evening because he invested in the film.

Seeing him on that stage might make you wonder whether film investing only makes sense when a project looks destined for awards season. It doesn’t. A film production can potentially qualify for Section 168(k) treatment from the IRS without ever becoming a critically acclaimed movie or a box-office hit. A horror film, comedy, drama, romantic comedy, or even a modest independent production may qualify when it satisfies the federal tax requirements. As with any project as an investor, you still need to evaluate the project as an investment, including the possibility of losing money.

The tax angle begins with a part of the Internal Revenue Code that many investors have encountered in a very different context.

What Does Section 168(k) Have to Do With a Movie?

Business owners and real estate investors may already know about bonus depreciation from equipment purchases and cost-segregation studies, as well as other investments involving depreciable property. Section 168(k) of the Internal Revenue Code (IRC) allows an additional first-year depreciation deduction for qualified property. In July 2025, H.R. 1 (the One, Big, Beautiful Bill Act – OBBBA) amended the provision and permanently established a 100 percent additional first-year depreciation deduction for qualified property acquired after Jan. 19, 2025. Internal Revenue Service (IRS) Notice 2026-11 provides guidance for applying the amended rules.

Understanding Bonus Depreciation: When a business entity invests in certain types of property, federal tax law generally allows the cost of that property to be deducted through depreciation. Those deductions may otherwise occur over a period of years. Bonus depreciation can accelerate the deduction, allowing qualifying costs to be deducted much sooner. Under the current Section 168(k) rules, qualifying property may be eligible for 100 percent depreciation in the year it is placed in service. Certain qualified film and television productions can fall within these rules.

Motion pictures occupy an unusual place within those rules. Section 168(k) specifically includes a “qualified film, television or live theatrical production” within the definition of qualified property when the applicable requirements have been met. Congress first brought qualified film and television productions into Section 168(k) through the Tax Cuts and Jobs Act of 2017, and the current statute retains that treatment.

That creates a potential tax planning opportunity when an investor participates in a qualifying production through an entity taxed as a partnership. The entity may claim depreciation on eligible production costs, and the resulting tax items may flow through to its partners. An investor could therefore receive an allocation associated with bonus depreciation from an asset that looks very different from the machinery, vehicles, or other business property commonly associated with depreciation.

The word “potential” deserves attention because several things have to happen before a projected deduction becomes useful on an investor’s federal income tax return: Continue reading… Continue reading… Continue reading…

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