Qualified Business Income Archives

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

By Office Staff|2026-10-27T16:13:26-07:00October 27, 2026|Categories: Business Taxes|Tags: Business Tax Planning, Qualified Business Income, Section 179 Deductions, Small Business Tax Deductions|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…

The Top 10 Reasons Why Business Owners Need to Meet With a CPA This Summer

By Office Staff|2024-06-13T12:12:39-07:00June 13, 2024|Categories: Business Taxes|Tags: Business Advice, Depreciation, Employing Family Members, Qualified Business Income, Qualified Small Business Stock, Tax Planning|0 Comments

A few days ago here on the SWC blog, we shared why it’s important for individual taxpayers to meet with their CPA over the summer. It basically boils down to being prepared. No one wants to learn in the first quarter of 2025 that their state or federal tax liability could have been dramatically reduced or altogether eliminated had they just met with their CPA for one hour in June, July, or August.

As a business owner, the same logic applies. Below are the top 10 reasons why you as a business owner, entrepreneur, or an investor with an ownership stake in a business should schedule a mid-year meeting with your CPA this summer.

Take Advantage of Depreciation Tax Breaks: Current tax laws offer generous depreciation deductions for qualifying assets. By discussing your plans with us, we can help you maximize your Section 179 deductions and first-year bonus depreciation, potentially saving you significant amounts on your tax return.

Time Business Income and Deductions: Strategically timing your business income and deductions can lead to substantial tax savings. Whether it’s deferring income or accelerating expenses, we’ll help you make the right moves to align with your financial goals.

Maximize the Qualified Business Income (QBI) Deduction: The QBI deduction can be a significant tax saver for owners of pass-through entities. We’ll ensure you understand the complexities and limitations of this deduction, helping you plan to maximize your benefits.

Continue reading… Continue reading… Continue reading…

Deducting a Percentage of Your Qualified Business Income, Part 4: Small Business Guide to Reducing Your Tax Burden Legally

By Office Staff|2020-10-08T20:51:38-07:00August 6, 2020|Categories: Small Business Guide to Legally Reducing Your Tax Burden|Tags: Qualified Business Income|0 Comments

The 2017 Tax Cuts and Jobs Act (TCJA) lowered the top tax rate on C corporation income from 35 percent to 21 percent. This is considerably lower than the top rate of 37 percent on pass-through income from sole proprietorships, partnerships, and S corporations.

Cutting taxes for C corporations without also cutting taxes for small businesses, would probably have caused a stir with small-business owners justifiably exclaiming, “No fair!” To balance the scales, the TCJA allows small-business owners to deduct up to 20 percent of their qualified business income (QBI) from their taxable income for the year, calculated on an activity-by-activity basis.

This is a major change for most small-business owners, but it may leave you wondering what QBI is, how this change is likely to impact your taxes, and what the heck “calculated on an activity by activity basis” means? In this post, the fourth in our Small Business Guide to Reducing Your Tax Burden Legally series, we bring you up to speed on the QBI deduction.

Understanding the Different Income Types

The tax code has always distinguished different types of income and taxed them differently. TCJA created an entirely new type of business income, called qualified business income (QBI), and taxes it in a unique way. In this section, we define and compare the different types of income, including QBI.

Ordinary income

Ordinary income is what you earn from your work or your business. If you draw pension or IRA income, that’s ordinary income too. Here are a few key points about ordinary income:

Ordinary income is taxed at ordinary income tax rates.
Any salary you earn from your small business is ordinary income.
If your small business is a sole proprietorship, your entire net profit from the business is taxed as ordinary income. (You can change your business entity from sole proprietor to S corporation to reduce the amount taxed as ordinary income. See Part 3 in this series to find out more about business entities.)
You pay taxes on net So, for instance, if you file as married, you earn a salary from a job, and should your spouse lose money in a business, your spouse’s business loss reduces your net income (subject to tax) as a married couple.

Investment income

Investment income is money you earn from your investment portfolio, and different types of investment income are taxed at different rates: Continue reading… Continue reading… Continue reading…