Are these three items getting a second look before year-end?
For business owners and self-employed professionals. Eligibility depends on your situation.
Qualifying equipment placed in service this year may be deducted faster under Section 179 or bonus depreciation, instead of over several years. Limits, vehicle caps and business-use tests apply, and the asset must be in service by year-end, not just ordered.
List planned purchases with the date each will be in service. Keep invoices and proof of the in-service date.
Ordinary and necessary advertising, website and promotion costs are generally deductible. Keep personal and business use separate, and note that some start-up or launch costs follow different rules.
Save invoices and note the campaign or purpose for each marketing spend.
Med spa owners with high income may look at a solo 401(k) or SEP. For 2026 the 401(k) employee deferral limit is $24,500 and SEP contributions can be up to the lesser of 25% of pay or $72,000. A cash balance plan can allow more but has required contributions. Staff coverage rules apply.
Compare plan types with a tax professional before year-end.
Augusta rule. Under Section 280A(g), if you rent out a home you also use as a residence for fewer than 15 days in a year, the rent is not taxable income to you. For a business renting your home for meetings, that means up to 14 days. The rent must be a fair market rate, the use must be a real business use, and it needs a written agreement, minutes or an agenda, and proof of the rate. It does not work for a sole proprietor renting to themselves.
Paying family members. Wages paid to a family member can be deductible when the work is real and the pay is reasonable for the job. Keep time records and job duties. Payroll tax treatment depends on the entity and the family member's age. A child under 18 working for a parent's sole proprietorship is exempt from Social Security and Medicare tax, but not from income tax withholding rules. Corporations do not get that exemption.
IRS residential rental property guidance ↗ IRS family employee rules ↗
Business expenses must be ordinary and necessary. Keep receipts and the business purpose; separate personal use and reimbursements. Dollar limits shown are for 2026 and can change; eligibility and entity type matter. General education, not individual tax advice.
Book a free 15-minute year-end tax check with Louisa, by phone.
Book your free 15-minute tax check →Or call or text 281-656-9666.