📅 2026 Update: Changes in Tax Laws That Affect Businesses

Since the original article was published, there have been several important changes to tax laws that businesses and individuals should know about. These updates impact deductions, filing procedures, and eligibility for various tax benefits. The earlier article continues further down the page.

💵 Standard Deduction Increase

For tax year 2026, the standard deduction has increased. Single filers and married individuals filing separately can now claim $16,100, up from $15,000 in 2025. Married couples filing jointly can claim $32,200, an increase from $30,000.

Heads of households have a standard deduction of $24,150, up from $23,000. This increase allows more taxpayers to reduce their taxable income.

🎁 New Charitable Deduction for Non-Itemizers

Starting from the 2025 tax year, taxpayers who claim the standard deduction can now deduct cash donations to qualified charities. Single filers can deduct up to $1,000, while married couples filing jointly can deduct up to $2,000. This change encourages charitable giving and provides financial relief for those who do not itemize their deductions.

👵 Senior Tax Deduction

Individuals aged 65 and older qualify for an additional $6,000 federal tax deduction, effective for the 2025 tax year. This deduction is available regardless of whether the taxpayer itemizes. It helps seniors manage their tax burden as they often have fixed incomes.

👔 Elimination of Federal Income Tax on Tips

Beginning in the 2025 tax year, tipped workers are no longer required to pay federal income tax on their tips. This change aims to lessen the tax burden on those who rely heavily on tips for their income, such as restaurant servers and taxi drivers.

📌 Key Points Summary

  • Standard deduction for 2026 is $16,100 for singles, $32,200 for married couples.
  • New charitable deduction allows up to $1,000 for singles and $2,000 for married couples.
  • Seniors aged 65+ get an additional $6,000 deduction.
  • Tipped workers no longer pay federal income tax on tips starting 2025.

💡 Tips for Managing Your Taxes

Review the details of your situation with your attorney.

📅 File On Time

The deadline to file individual tax returns for the 2025 tax year is April 15, 2026. If this date falls on a weekend or holiday, it may be extended to the next business day. Timely filing helps avoid penalties and interest.

💵 Consider the Standard Deduction

Most taxpayers are eligible for the standard deduction unless they choose to itemize. The higher standard deduction for 2026 can significantly lower taxable income, making it important to evaluate whether itemizing is beneficial.

🎁 Document Charitable Donations

Taxpayers claiming the standard deduction can deduct cash donations to qualified charities. Keep records of donations to ensure you can claim this deduction. This can provide additional tax savings.

👵 Utilize Senior Deductions

Seniors aged 65 and older can take advantage of the additional $6,000 deduction. This can ease tax burdens and is available regardless of itemization status. Ensure you include this when calculating your taxes.

🔍 Monitor AMT Eligibility

The Alternative Minimum Tax (AMT) may apply to those with high income. Taxpayers should be aware of the AMT rates and complete Form 6251 to determine if they are affected. Keeping track of income can help in planning.

🏆 Top Tax Services Ranked by User Reviews (2026)

This section lists tax services that can help with filing and preparation. Their ratings are based on Trustpilot data as of October 2026. Scores can change as new reviews are added.

Ratings reflect user experiences, and unhappy customers often leave more feedback, so consider this when reviewing.

🥇 1. efile4Biz

Efile4Biz has been rated 4.7. It is known for its easy online filing and affordable services. However, some users report occasional navigation issues and limitations in customer support.

This service can be a good fit for businesses looking for straightforward tax filing.

🥈 2. TaxSlayer

TaxSlayer holds a Trustpilot score of 4.2. Reviewers appreciate its online tax preparation and affordable pricing. Some users mention occasional technical issues and concerns about pricing.

This service may be suitable for those seeking a cost-effective solution for tax preparation.

🥉 3. 1040.com

1040.com averages 4.5. It is recognized for its user-friendly interface and flat-rate pricing. However, there are reports of navigation challenges and technical glitches.

This service can help simplify the filing process for users who prefer a straightforward platform.

🆓 Free Government and Nonprofit Help

The IRS offers free resources like the Free File program, which provides online tax preparation for eligible taxpayers with an adjusted gross income of $73,000 or less. Volunteer Income Tax Assistance (VITA) also offers free help for individuals making $60,000 or less. These programs can be beneficial for those needing assistance without incurring costs.

🔎 What to Compare When Choosing a Tax Service

  • 🚀 Ease of online filing
  • 💰 Affordability of services
  • 🛠️ User interface and navigation
  • 📞 Availability of customer support
  • 📊 Reviews and ratings from other users

❓ Frequently Asked Questions

❓ What is the standard deduction for 2026?

The standard deduction for 2026 is $16,100 for single filers and $32,200 for married couples filing jointly. This increase can help reduce taxable income significantly.

📅 When is the tax filing deadline for 2025?

The deadline to file individual tax returns for the 2025 tax year is April 15, 2026. If this date falls on a weekend or holiday, the deadline may be extended to the following business day.

🎁 Can I deduct charitable donations if I take the standard deduction?

Yes, taxpayers who claim the standard deduction can deduct cash donations of up to $1,000 for single filers and up to $2,000 for married couples filing jointly. This applies to donations made to qualified charities.

👵 Who qualifies for the senior tax deduction?

Individuals aged 65 and older are eligible for an additional $6,000 federal tax deduction. This is available regardless of whether deductions are itemized.

💵 How does the Alternative Minimum Tax (AMT) work?

The AMT applies to taxpayers with high economic income by setting limits on certain tax benefits. Taxpayers should complete Form 6251 to determine if they are subject to the AMT.

🔍 What resources are available for free tax help?

The IRS provides free options like the Free File program for eligible taxpayers and the Volunteer Income Tax Assistance (VITA) program for individuals earning $60,000 or less. These resources can assist with tax preparation without cost.

⚖️ Recent Court Cases Related to Taxes

Recent court rulings have clarified various aspects of tax law, impacting both businesses and individuals. These rulings reflect ongoing changes in tax regulations and how they are interpreted.

For more recent rulings, you can browse more rulings on the news page.

End of October 2026 Update





Introduction


As a business owner, one of the most important tasks is handling taxes. Taxes are not the most pleasant aspect of running a business, but they are necessary. They can be quite complicated, especially for small businesses that lack an accounting department. Knowing exactly how to handle taxes can help business owners avoid penalties and interest charges. In this article, we will explore the ways businesses should handle their taxes.

1. Understand Which Taxes Apply to Your Business

Understanding which taxes apply to your business is crucial for proper tax handling. Federal taxes such as income tax, social security and Medicare, excise tax, and self-employment tax apply to most businesses. Depending on the business type and location, state taxes, for example, sales tax, property tax, and income tax, can also apply.

New businesses must ensure they are registered with the Internal Revenue Service (IRS) to avoid IRS penalties. Business owners need to have EIN or Employer Identification Number to identify the business for tax purposes.

2. Keep Accurate and Complete Records

Keeping accurate and complete financial records is vital for tax filing and compliance. The records can help businesses justify deductions and credits applicable to the business. Record keeping can also help businesses in budgeting, forecasting, and decision making. Good record-keeping practices can help businesses avoid tax trouble and scrutiny from the IRS during an audit.

There are different software platforms that businesses can use to maintain their financial records. The system should have an easy-to-use interface for inputting income and expenses. Keeping records digitally can make it easier to file taxes, and businesses can more easily track expenses and legal obligations. Making manual records might also work, but it is more time-consuming and more prone to mistakes.

📝 See Also

3. Timely Filings and Payments

Business owners should ensure that they file tax returns promptly and on time. Late filings can incur additional penalties and interest charges. Businesses should determine their filing obligations and deadlines and ensure that they meet them. They should keep in mind that tax returns rely on the business type, location, and other factors. Filing taxes electronically offers an easier and more efficient way of complying with tax obligations.

Businesses should keep track of expected tax payments since underestimating estimated tax obligations can result in unnecessary fees and penalties. Reporting and paying the estimated taxes promptly should be viewed as an essential element of tax planning.

4. Enlist Accounting Professionals

Enlisting the services of qualified accounting experts can improve the handling of business taxes. Accounting professionals can help businesses navigate through complex tax codes and regulations and help owners avoid penalties and fees.

The experts help businesses identify applicable tax credits and income tax deductions and ensure compliance with tax regulations. Accounting professionals have the knowledge and experience needed to keep accurate records, prepare financial statements, balance books, and file taxes.

5. Take Advantage of Tax Credits and Deductions

Businesses should consider taking advantage of tax credits and deductions since they can significantly reduce tax obligations. Tax credits come in different forms, including research and development tax credits, small business health care tax credit, and energy-saving tax credits.

Deductions come in various forms, including the business expenses, home office deductions, and business use of a personal vehicle deduction. Businesses should remain updated with available tax credits and deductions and consult with accounting professionals to identify the tax credits and deductions that apply to their business.

6. Stay Updated

The tax code and regulatory laws keep changing, and businesses should ensure that they stay updated. Business owners can consult with accounting professionals to keep up-to-date on tax codes and regulations that apply to their business.

Business owners should also read and pay attention to updates and changes to tax laws issued by the government. They can do that by regularly reading publications from IRS and state tax authorities. Updated information makes tax planning more effective, helps businesses avoid penalties, and ensures that they remain compliant with tax regulations.

Conclusion


Business taxes require adequate attention to detail, planning, and careful record-keeping. Business owners must ensure that they have a deep understanding of applicable taxes and their filing obligations. Businesses should keep accurate records, enlist accounting professionals, file taxes on time, and take advantage of available tax credits and deductions.

The government remains dedicated to helping business owners by continuously updating tax regulations. The IRS and state tax authorities provide different avenues to keep businesses updated on new tax regulations. By following the guidelines above and keeping up to date, business owners should find it much easier to handle their taxes and avoid unnecessary penalties, fees, and audits.

Businesses, no matter the size, are all subject to federal taxation. Depending on the size of the company, whether it be small businesses or mid-to-large caps, the IRS will demand the appropriate filing of various forms.

All forms associated with business taxation can be found at the IRS website. The IRS website also provides detailed instructions on how to file such forms, as well as a section which contains all IRS forms download. At the IRS website a user will be able to download the actual forms and observe how they correlate to a business's needs.

The form and size of the business in question will determine which taxes are levied, the appropriate amount owed, and the applicable IRS form. The IRS subdivides the types of business taxes into four distinct groups:Income tax, Self-Employment tax, Employment taxes, and Excise taxes. Each class of taxation requires the filling of different forms and is documented in detail at the IRS website.

In addition to the varying forms and levies, the IRS has also categorized businesses into:sole proprietorship, partnerships, corporations, S corporations (pass federal tax responsibilities to shareholders), and limited liability companies. Depending on the make-up of the LLC, the company will file an individual tax return, a corporation tax return, or a partnership tax return.

For clarity's sake we will divide the different types of taxes and list the appropriate forms used for each type of business.

Income Tax-All businesses except partnerships (files an information return) are mandated by federal law to file an income tax return. The form used depends on the type of business in question. Essentially making it a "pay-as-you-go tax", the federal income tax must be paid as the business earns or receives income during the year. Listed below are the types of businesses and the appropriate forms used to file income tax.


Sole Proprietorship (according to the IRS website) -


1040 US individual tax return (specifically Schedule C)

Form 1040 (Profit or loss from Business) or Schedule C-EZ

Form 1040-Net Profit from business


Corporations (according to the IRS website) -


1120, U.S. Corporation Income Tax Return (IRS forms download available at IRS website)


S Corporation (according to the IRS website) -


1120S

1120 Sch-K-1 (IRS forms download available at IRS website)

Self-Employment Tax-A tax levied for individuals who work for themselves. The Self-Employment tax is paid for the use of social security and Medicare. This form of tax is only relevant for a sole proprietorship or some forms of limited liability companies. An individual pays the Self-Employment tax using the 1040 form under schedule SE. The individual will owe this tax if he/she meets one of the following requirements.

If net earnings from self-employment exceed $400.

If work was done for a church or church-controlled organization that elected a social security or Medicare exemption.

An individual is subject to the SE tax if he/she received $108.28 or more in wages from the church or affiliated organization.

Employment Taxes-If a company has employees they are responsible for certain tax responsibilities which must be paid and filed appropriately. Employment taxes include:social security and Medicare taxes, Federal income tax withholding, and Federal unemployment tax.

Partnerships (according to the IRS website)-

Form 941, Employer's Quarterly Federal Tax Return

Form 943, Employer's Annual Federal Tax Return (for agricultural employees)

Form 940, Employer's Annual Federal Unemployment Tax Return

Form 8109-B, Federal Tax Deposit Coupon

Individual partners in a partnership must file form 1040 Individual Income Tax Return Schedule E, Supplemental Income and Loss (All IRS forms download available at IRS website)


Corporations (according to the IRS website) -


1120-W Estimated Tax for Corporations

Form 941, Employer's Quarterly Federal Tax Return

Form 943, Employer's Annual Federal Tax Return (for agricultural employees)

Form 940, Employer's Annual Federal Unemployment Tax Return

Form 8109-B, Federal Tax Deposit Coupon (All IRS forms download available at IRS website)

S Corporations -


Form 941

Form 943

Form 940

Form 8109-B (IRS forms download available at IRS website)

Excise Taxes-The following forms are used for excise taxes and apply to certain types of corporations depending the manufacturing, sale, equipment used, and payment received of certain products.

Form 720 (Quarterly Federal Excise Tax Return) consists of broad categories of taxes:environmental taxes, air transportation and communication taxes, fuel taxes, tax on the sale of heavy trucks, trailers, or tractors, and manufacturers taxes on the sale and use of various articles.

Form 2290 (Heavy Highway Vehicle Use Tax) -Tax applied to businesses that use heavy trucks, buses, or trailers on public highways. The tax applies to vehicles which have a gross weight of 55,000 lbs or over.

Form 730 (Monthly Tax Return for Wagers)-applies to businesses which accept wagers or conduct a wagering lottery.

Form 11-C (Occupational Tax and Registration Return for Wagering)-taxes the use of various excise programs such as motor fuel.