June 12, 20264 min readby KDM Accounting Services Inc

What's new for 2026: the OBBBA tax changes every South Florida S-Corp owner should act on before year-end

2026 is the first full tax year under the One Big Beautiful Bill Act (OBBBA), and the IRS has now published the figures and the implementation guidance that make it real. The 2026 inflation-adjusted numbers were locked in by Rev. Proc. 2025-32, and a wave of guidance through spring 2026 filled in the details — including a brand-new tax form for four deductions that did not exist a year ago.

For an owner-operated S-Corp in South Florida, a handful of these changes are worth real money — and a few of them reward moves you make before December 31. Here is what actually matters, and what to do about it.

Four new deductions — and your payroll is involved

The headline change for 2026 is a set of four new individual deductions the IRS will collect on the new Schedule 1-A (announced in IR-2026-28 on March 2, 2026):

No tax on tips — deduct up to $25,000 of qualified tips, phasing out above $150,000 (single) / $300,000 (joint).
No tax on overtime — deduct up to $12,500 (single) / $25,000 (joint) of the FLSA overtime premium.
Car-loan interest — deduct up to $10,000 of interest on a qualifying new vehicle (IRC §70203).
Senior deduction — an extra $6,000 per person age 65+ (born before January 2, 1961), phasing out above $75,000 / $150,000.

"No tax" is a useful slogan but a misleading one. These are income-tax deductions, not exemptions — and they do not remove payroll tax. Social Security and Medicare still apply to every tip and overtime dollar, and so does your S-Corp's share. What changes is how the employee reports it, and what you have to put on their W-2: the IRS finalized the employer reporting rules in IR-2026-49 / T.D. 10044. If you run a restaurant, salon, trades crew, or any business with tipped or overtime staff — which describes a lot of South Florida — your payroll setup needs to capture this correctly for the 2026 W-2s.

Buying equipment? Full write-offs are now permanent

If your business buys trucks, tools, machinery, or technology, 2026 is a strong year to do it:

100% bonus depreciation is permanent again. Under §168(k), property acquired after January 19, 2025 can be fully expensed in year one — the IRS confirmed the mechanics in Notice 2026-11.
Section 179 expensing rose to a $2,560,000 cap, with the phase-out starting at $4,090,000 (Rev. Proc. 2025-32).

For construction, specialty trades, and owner-operator trucking, that means a qualifying equipment purchase placed in service by December 31 can come straight off 2026 income — no multi-year depreciation schedule.

The QBI deduction is permanent — with a new floor

The Section 199A Qualified Business Income deduction — the 20% pass-through deduction that S-Corp and other pass-through owners rely on — is now permanent. For 2026 the income thresholds are $403,500 (joint) / $201,750 (others), and OBBBA added a permanent $400 minimum QBI deduction for active small businesses. For most owner-operators the planning question is unchanged but higher-stakes: keep taxable income positioned to preserve the full deduction.

R&D is deductible in the year you spend it again

OBBBA restored immediate expensing of domestic research costs under new IRC §174A for tax years beginning after December 31, 2024 (transition rules in Rev. Proc. 2025-28). If you build software or do technical development in-house — common for the IT and SaaS consulting firms we work with — you can expense those costs again instead of amortizing them over five years.

FinCEN: most U.S. companies no longer file a BOI report

One of the most-asked questions over the past two years was the Corporate Transparency Act beneficial-ownership (BOI) filing. The answer changed: FinCEN's interim final rule (Federal Register 2025-05199, March 26, 2025) narrowed the definition of a "reporting company" to entities formed outside the United States. U.S.-formed companies and U.S. persons are exempt from BOI reporting. The rule is still interim rather than final, but it is in effect — so if you formed your S-Corp in Florida and were worried about a missed BOI deadline, you are very likely off the hook.

The Florida angle

Florida has no state income tax, which quietly changes the math on several of these. The national fight over the SALT cap — the deduction for state and local taxes — is largely moot for Florida residents, because there is little state tax to deduct in the first place. Where Florida S-Corp owners actually win is the federal side: the salary-versus-distribution split, the now-permanent QBI deduction, full equipment expensing, and the new payroll-linked deductions for tipped and overtime staff.

What to do before December 31

Fix payroll reporting now. Make sure tips and FLSA overtime are tracked so the 2026 W-2s support your employees' Schedule 1-A deductions.
Time equipment purchases. If a truck, tool, or system is coming in early 2027, pulling it into 2026 may let you expense it fully this year.
Re-run your reasonable-compensation number. With QBI permanent, the salary/distribution balance deserves a fresh look against your actual profit.
Stop worrying about BOI if your entity was formed in the U.S. — but keep an eye out for a final FinCEN rule.
Model it before year-end, not in April. Most of these moves only work if made before December 31.

These rules are new, and the guidance is still arriving. If you want to know what they mean for your numbers specifically, that is exactly what a year-end planning conversation is for.

Frequently Asked Questions

Do I still have to file a FinCEN BOI (beneficial ownership) report?

If your entity was formed in the United States, no. FinCEN's March 2025 interim final rule (Federal Register 2025-05199) limits BOI reporting to companies formed outside the U.S., so domestic S-Corps and LLCs are exempt. The rule is still interim rather than final, so watch for a finalized version, but as of mid-2026 U.S.-formed companies do not file.

Are tips and overtime really tax-free now?

No — they are income-tax deductions with caps and phase-outs (up to $25,000 for tips and $12,500/$25,000 for overtime for 2026), claimed on the new Schedule 1-A. Payroll taxes (Social Security and Medicare) still apply to every tip and overtime dollar, and employers still report them on the W-2 under the rules in T.D. 10044.

Is 100% bonus depreciation actually permanent now?

Yes. OBBBA made 100% bonus depreciation under §168(k) permanent for qualifying property acquired after January 19, 2025, and the IRS confirmed the details in Notice 2026-11. Combined with the higher Section 179 cap ($2,560,000 for 2026), most small businesses can fully expense qualifying equipment in the year it is placed in service.

I'm in Florida — does the SALT cap matter to me?

Very little. Florida has no state income tax, so the deduction for state and local taxes (the SALT cap) has limited impact for Florida residents. Your bigger 2026 levers are the S-Corp salary/distribution split, the now-permanent QBI deduction, equipment expensing, and the new tip/overtime deductions for your staff.