What changed
The IRS released 2026 inflation adjustments for tax brackets, the standard deduction, and a long list of limits and thresholds. Example: standard deduction amounts for 2026 are increasing (married filing jointly, single, head of household, etc.). These apply to tax year 2026, which you’ll actually file in 2027.
Why you should care before 2026 gets here
- Owner payroll: If you’re paying yourself through an S-Corp, “reasonable compensation” and your withholdings might need to move.
- Quarterly estimates: Different brackets and deduction amounts change how much you should be sending in.
- Personal vs. business cash flow: Your take-home and your tax liability may not move in the same direction.
Quick checklist
- Re-run a 2026 projection using the updated brackets and standard deduction.
- Adjust your reasonable compensation number so it still makes sense under the new brackets.
- Update your quarterly estimate plan so you’re not underpaying all year.
- Review phaseouts and credit limits that could affect you or your spouse.
FAQ
- When do these numbers actually matter? Tax year 2026 (the return filed in 2027).
- Do I have to redo payroll now? You don’t have to — but smart owners do, so they’re not scrambling at the end of next year.
How Black Inc can help
- Owner pay modeling: We help you size your W-2 salary vs. distributions so it’s defendable and tax-efficient.
- Quarterly estimate planning: We’ll map what you should be paying in each quarter to stay compliant and avoid underpayment penalties.
- Scenario planning: We’ll run “what if I take more out of the company?” vs. “what if I leave cash in?” so you can plan bonuses, profit draws, etc.
- Spouse/household review: We also look at filing status, credits, and deductions that affect the total household tax bill — not just the business.