2026 Tax Planning: Strategic Moves to Start in January

A fresh tax year creates a clean slate for planning, and January is the ideal time to set yourself up for a stronger financial position. Whether you work for yourself, manage a small business, or juggle multiple income streams, early action can help you avoid penalties and improve your cash flow. Myrick CPA works with clients across the country to build smart, forward-looking strategies that begin well before the first deadline.

Review Withholding and Estimated Tax Needs Early

If your 2025 withholding did not fully cover your taxes, it's important to determine whether you will need quarterly estimated payments for 2026. The IRS safe harbor rules provide a clear starting point. Most taxpayers avoid penalties if they pay at least 90 percent of their current year tax or 100 percent of their prior year tax. If your adjusted gross income for 2025 exceeded $150,000, the safe harbor rises to 110 percent of your prior year tax.

January is the easiest time to adjust a W-4, update payroll withholding, or prepare for estimated payments in April, June, September, and January. Freelancers, contractors, gig workers, investors, and S-Corp owners often benefit from reviewing these numbers right away.

Use Updated OBBBA Rules to Guide Early Decisions

The new Federal Tax Law, OBBBA, signed in July 2025, gives small business owners more predictability than in recent years. Two provisions are especially useful when planning early in the year.

• Permanent 100 Percent Bonus Depreciation: OBBBA restored and made permanent the 100 percent bonus depreciation for qualified property placed in service after January 19, 2025. This allows business owners to deduct the full cost of eligible equipment or technology in the year the item is put into service. Since this rule no longer faces a phase-down schedule, you can plan purchases without worrying about expiring timelines.
• Section 179 Expensing Limits Raised: The law also increased the Section 179 deduction limit to $2.5 million with a $4 million phase-out threshold. Choosing between Section 179 and bonus depreciation depends on income levels, long-term planning goals, and whether your state follows federal rules. Reviewing these options in January gives you time to map out the right approach.

Revisit Retirement and Savings Contributions

Early in the year is a good time to review how aggressively you plan to fund a 401(k), IRA, SIMPLE, or SEP. Contributions to your retirement plan reduce taxable income and build long-term security at the same time. Health Savings Accounts and Flexible Spending Accounts deserve the same attention, especially if you expect changes in medical expenses.

Plan for Cash Flow and Capital Needs

Assess your expected income for the year, along with any major expenses you plan to take on. Business owners should review staffing, contractor costs, and anticipated equipment purchases. A clear January projection makes it easier to decide whether to adjust withholding or increase estimated payments.

FAQs

Do the 2026 quarterly estimated tax deadlines change?

They generally fall in April, June, September, and January. Dates only shift if they land on a weekend or holiday.

Does bonus depreciation apply for the entire year?

Yes. The OBBBA made 100 percent bonus depreciation permanent for qualifying property placed in service this year.

Can I adjust withholding instead of making quarterly payments?

In some cases, increasing withholding is enough to meet safe harbor rules. A CPA can help you determine the best method.

Start 2026 With a Clear Strategy

Early planning helps you avoid penalties and gives you more control over your financial year. Myrick CPA provides personalized guidance through virtual consultations and a secure online portal, making it simple to stay organized from anywhere.

For a confident start to 2026, schedule a beginning-of-year planning session today.