Tax compliance does not end when a return is accepted. The Internal Revenue Service continues to process information, match records, and generate notices for months after a filing season closes, and the One Big Beautiful Bill Act changed several mechanics that now play out across the entire year rather than at a single filing deadline. Public Law 119-21, enacted July 4, 2025, made some provisions permanent, phased others in for 2026, and created new deadlines and documentation requirements that have nothing to do with April. The IRS’s guidance hub for the One, Big, Beautiful Bill is still being updated as the agency implements these changes and waiting until next filing season to address them narrows the options available today. Tax problems are easier to manage before the IRS process controls the timeline. If a practical review of exposure, planning options, or IRS correspondence would help, speak with Steve Perry, EA. Call 678-717-9818, email steve@bookstaxesatl.com, or connect on LinkedIn at www.linkedin.com/in/steveperrybtm.
What the OBBBA made permanent for 2026
Several provisions that businesses had grown used to treating as temporary are now part of permanent law, which changes how they should be planned around rather than removing the need for planning.
Bonus depreciation returned to 100 percent, permanently, for qualified property acquired after January 19, 2025, reversing the phase down that would have limited the deduction to 20 percent in 2026 under prior law. The IRS confirmed this treatment when it issued guidance on the additional first year depreciation deduction as amended by the One Big Beautiful Bill. The Section 179 expensing limit rose to $2,560,000 for 2026, with the phase out threshold set at $4,090,000, both now indexed for inflation under the IRS’s 2026 inflation adjustments. The Section 199A qualified business income deduction, which allows a 20 percent deduction for many pass-through businesses, is now permanent rather than scheduled to expire, and the income thresholds at which the deduction phases out for service businesses have been widened for 2026 under that same inflation release. Domestic research and experimental costs can again be deducted immediately under new Section 174A rather than spread over five years, and businesses with average gross receipts of $31 million or less can apply that treatment retroactively to costs incurred after December 31, 2021, following the instructions for Form 6765 and IRS Publication 925. The Section 163(j) business interest expense limitation reverted to the more favorable EBITDA based calculation for tax years beginning after 2024, and the IRS updated its frequently asked questions on the business interest limitation to reflect that capitalized interest is being pulled into that limitation starting in 2026.
None of these provisions apply themselves. Bonus depreciation and Section 179 both require a purchase, a placed in-service date, and an election made with a timely filed return. The QBI deduction requires wage and unadjusted basis records that support the calculation. The Section 174A election may require a method change filing. Permanence changed the law, not the recordkeeping needed to support these positions on a return.
Why filing the return is not the end of the process
A common assumption is that once a return is filed and accepted, the tax year is closed. That is not how IRS processing works. Returns are filed, then information returns filed by employers, banks, brokers, and payment processors are matched against them through automated systems, and mismatches generate notices that can arrive many months later, often well into the following filing season. The Automated Underreporter Program is the clearest example: a business owner who filed correctly in the spring may still receive a notice the following winter because a 1099 filed by a third party did not match what appeared on the return.
This sequence matters for planning. An IRS notice is not an isolated event; it is one step in a sequence that moves toward assessment and, if ignored, collection action. Waiting to respond or waiting to gather records until a notice becomes serious, removes options that were available earlier, such as correcting a mismatch informally, providing documentation before a proposed adjustment becomes final, or requesting an installment arrangement before penalties and interest accumulate further. Before assuming a tax position is settled for the year, consider having Steve Perry, EA evaluate the underlying records, IRS risk, and planning opportunities. Call 678-717-9818, email steve@bookstaxesatl.com, or connect on LinkedIn at www.linkedin.com/in/steveperrybtm.
New reporting thresholds change what the IRS already knows
Two information reporting changes under the OBBBA directly affect the data the IRS receives about a small business, and both took effect for 2026.
The Form 1099-K threshold for third party payment networks reverted to $20,000 and more than 200 transactions, replacing the lower $600 threshold that had been phased in, under IRS guidance on the Form 1099-K threshold. Separately, the reporting threshold for Form 1099-NEC and Form 1099-MISC rose from $600 to $2,000 for payments made after December 31, 2025, under Public Law 119-21, and that change is reflected in the instructions for Forms 1099-NEC and 1099-MISC. These are two different forms with two different rules, and business owners sometimes confuse them in ways that create gaps in their own records even when no form is required to be filed.
A higher reporting threshold does not mean income below that threshold is not taxable, and it does not reduce a business owner’s own recordkeeping obligation. It means fewer third-party forms will reach the IRS automatically, which shifts more of the burden of demonstrating income and expenses onto the business’s own books if a question arises later. A business that relied on receiving a 1099 to know what to report now needs its own internal tracking for smaller payments that will no longer generate a form.
Provisions that reward planning rather than waiting
Several other OBBBA changes create decision points that exist during the year, not at filing time.
- Qualified small business stock under Section 1202 now allows a partial exclusion of gain starting at a three year holding period for stock acquired after the OBBBA’s enactment date, with the gross asset test for issuing companies raised to $75 million and the per issuer exclusion cap raised to $15 million, as reflected in the instructions for Schedule D and the IRS’s explanation of the business tax provisions.
- The employer provided childcare credit rate increased from 25 percent to 40 percent, with a 50 percent rate and a higher cap for eligible small businesses, for amounts paid or incurred after December 31, 2025, under the IRS’s guidance on the credit for tax year 2026 and later.
- Deductions for employer-operated eating facilities and meals provided for the convenience of the employer are fully disallowed for amounts paid or incurred after 2025, a change from the 50 percent deduction many businesses had grown accustomed to applying, under IRS Publication 15-B and Section 274(o).
- The Section 174A domestic research expensing election and any related method change generally need to be addressed with the return for the year they first apply, not after the fact.
- Bonus depreciation and Section 179 elections depend on when property is placed in service, which is a decision made during the year a purchase happens.
There may be other planning items depending on a business’s specific facts and circumstances. Each of these has a window in which it can be used effectively, and each window closes based on a transaction date or an election deadline rather than the filing deadline. If IRS notices, unpaid balances, missing records, or planning gaps are starting to create concern, speak with Steve Perry, EA before the problem becomes harder to control. Call 678-717-9818, email steve@bookstaxesatl.com, or connect on LinkedIn at www.linkedin.com/in/steveperrybtm.
Assumptions that create avoidable risk
Three assumptions tend to surface one year into a major tax law change.
The first is that a permanent provision means no further action is needed. Permanence removes an expiration date, not a requirement to elect, document, or apply the provision correctly on a specific return.
The second is that nothing meaningful can happen until the next filing season. IRS matching, notice generation, and collection timelines run continuously, and a business’s own planning opportunities, such as a fourth quarter equipment purchase or a method change filing, are also tied to dates within the current year, not to the following April.
The third is that outcomes today resemble outcomes from several years ago. Expanded information reporting, automated matching, and more consistent enforcement sequencing mean a mismatch or an unaddressed notice is more likely to be identified, and identified sooner, than it may have been in the past. That shift reflects system capability, not increased scrutiny directed at any particular business.
Managing the year instead of reacting to it
The OBBBA settled several long running questions about depreciation, the qualified business income deduction, and research cost recovery, but settling the law is different from settling a business’s own tax position for the year. That position still depends on how a business documents purchases, tracks payments that fall under the new reporting thresholds, and responds when a notice or a planning window appears.
Most IRS problems that become difficult to resolve do not start with a filing mistake. They start with a notice that was set aside, a record that was never kept, or a planning opportunity that passed because no one was tracking the deadline. Good tax outcomes come from managing the year before the IRS forces the issue. For help reviewing next steps, speak with Steve Perry, EA. Call 678-717-9818, email steve@bookstaxesatl.com, or connect on LinkedIn at www.linkedin.com/in/steveperrybtm.
Does the OBBBA change how recordkeeping should work in 2026?
Yes. Higher 1099-K and 1099-NEC thresholds mean fewer third-party forms will be sent to the IRS, so a business’s own internal records carry more of the weight if income or expenses are ever questioned.
If a provision is now permanent, does an annual election still need to be made?
Often, yes. Bonus depreciation, Section 179, and the Section 174A research expensing rules are permanent as law but applying them to a specific asset or cost still depends on an election or method made with the return for that year.
How long, after filing, can the IRS still send a notice about a return?
Notices generated through information matching commonly arrive many months after filing, sometimes into the following filing season, because the matching process depends on when third party forms are processed.
Does a higher 1099-K or 1099-NEC threshold mean that income is not taxable?
No. The threshold determines whether a form must be filed by the payer. It does not change whether the underlying payment is taxable income to the recipient.
What is the first step after reviewing these changes?
Confirm which provisions apply to a business’s specific purchases, payroll structure, and entity type, and address any outstanding notices or missing documentation before the next filing season narrows the available options.
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