Looking Ahead to 2026: Estimated Taxes and New Compliance Rules for Small Businesses

January is a good time not only to close the books on 2025 but also to look ahead at what 2026 will bring. This article highlights key estimated tax concepts and upcoming reporting changes—such as electronic filing thresholds, 1099‑K rules, and beneficial ownership reporting—so small businesses can plan rather than react.

• • Why plan for 2026 now

     

    Many business owners think of taxes as a once‑a‑year event. In reality, estimated payments, information returns, and new reporting rules can affect your cash flow and administrative workload all year long.

     

    Starting the year with a clear picture of what’s coming helps you:
    • • Avoid underpayment penalties.
    • • Budget for tax payments instead of being surprised.
    • • Make sure your systems and advisors are ready for new requirements.

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    Refresh on estimated tax basics for business owners

     

    If you’re self‑employed or own a pass‑through business (such as an LLC, partnership, or S corporation), you may need to make quarterly estimated tax payments for 2026.

     

    These payments typically cover:

     

    • • Federal income tax on business profits.
    • • Self‑employment tax (Social Security and Medicare) on your share of earnings.
    • • Maryland income tax and local tax, often via state estimated payments.

     

    While the exact safe harbor rules can be technical, many owners aim to pay at least:

     

    • • 100% of last year’s total tax (or 110% for higher‑income taxpayers), or
    • • 90% of the current year’s expected tax.

     

    Planning step: Once your 2025 return is drafted, ask your tax advisor to project 2026 income and design an estimated payment schedule that fits your cash flow.

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    Electronic filing requirements for information returns

     

    The IRS now requires many businesses to electronically file information returns like W‑2s and 1099s.

     

    Key considerations for 2026:

     

    • • If you file 10 or more total information returns (combining W‑2s, 1099s, and certain other forms), you’re generally required to e‑file.
    • • This threshold applies to many small businesses that previously mailed paper forms.

     

    To prepare:

     

    • • Confirm which forms you expect to file in early 2027 for the 2026 year.
    • • Ensure your payroll and accounting systems—or your outside provider—can handle electronic submission.

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    1099‑K and third‑party payment reporting

     

    Reporting rules around Form 1099‑K (Payment Card and Third‑Party Network Transactions) continue to evolve.

     

    While thresholds and timelines have been adjusted in recent years, the overall trend is toward more reporting of payments received through platforms like PayPal, Venmo (for business), and certain e‑commerce sites.

     

    What this means for you:

     

    • • Even if you don’t receive a 1099‑K, you still must report all business income.
    • • If you do receive a 1099‑K, you’ll want systems in place to match those amounts to your books and avoid double‑counting income.

     

    Practical tip: Clearly separate business and personal activity on payment apps and online platforms, and use bookkeeping that tracks gross receipts by channel.

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    Beneficial ownership reporting under the Corporate Transparency Act

     

    The Corporate Transparency Act (CTA) introduces new Beneficial Ownership Information (BOI) reporting requirements for many small businesses.

     

    • • Certain corporations, LLCs, and similar entities must report identifying information about individuals who own or control the company.
    • • Existing companies generally have until the end of 2025 to file their initial BOI report, while newly formed entities often must report within a short window after formation.

     

    Failure to comply can trigger penalties, so it’s important to:

     

    • • Confirm whether your business is covered or exempt.
    • • Gather required information for owners and key decision‑makers.
    • • Coordinate BOI filings with your legal and tax advisors.

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    ACA and payroll‑related reporting changes

     

    If you are an Applicable Large Employer (ALE) or sponsor certain health plans, you may see continued changes around Affordable Care Act (ACA) reporting and related notices, such as Forms 1095‑C.

     

    Even if you are not an ALE, keep an eye on:

     

    • • Minimum wage, overtime, and tip‑reporting rules that affect payroll.
    • • State‑level requirements, including Maryland payroll and leave mandates.

     

    Having a payroll provider or advisor who tracks these rules reduces the risk of falling behind.

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    How AllTax can help you plan ahead

     

    AllTax works with Maryland small businesses to translate complex rules into practical action steps. To help you prepare for 2026, we can:

     

    • • Use your 2025 results to design a custom estimated tax plan for federal and Maryland obligations.
    • • Review whether you’re subject to electronic filing, BOI reporting, or other new compliance rules.
    • • Coordinate with your payroll and legal providers so everyone is aligned on what needs to happen and when.
    • • Build a simple compliance calendar so nothing sneaks up on you during the year.

     

    If you’d like 2026 to feel more planned and less reactive, reach out to AllTax now so we can review your situation and map out your obligations together.