Practical updates for owners who want fewer surprises at tax time
“Current tax law” can feel like a moving target—especially when you’re balancing client work, payroll, and cash flow. This guide breaks down key 2026 federal updates and the South Carolina items that commonly affect small and mid-sized businesses, with a focus on what to track now so your year-end planning isn’t a scramble.
First, a quick “which tax year?” reality check
On January 28, 2026, most businesses are filing 2025 returns (due in 2026), while also planning for 2026 activity (returns generally filed in 2027). That distinction matters because many inflation-adjusted thresholds (deductions, brackets, payroll tables) change by tax year.
If you want planning to “stick,” align actions to the right year: timing income, bonuses, equipment purchases, retirement contributions, and estimated payments based on the year the transaction is recognized—not the year you file.
2026 federal individual updates that still matter to business owners
Even if you run an S corporation, partnership, or sole proprietorship, your business income often flows onto your personal return. That means federal “individual” changes can impact your effective tax rate and quarterly estimates.
1) Standard deduction and tax brackets for 2026 (filed in 2027)
The IRS announced inflation adjustments for tax year 2026. The standard deduction increases to $16,100 (Single / Married Filing Separately), $32,200 (Married Filing Jointly), and $24,150 (Head of Household). (irs.gov)
The same announcement provides updated 2026 bracket thresholds (still the familiar marginal rate structure), with the top rate applying above the high-income thresholds. (irs.gov)
| Tax item (federal) | 2026 value | Why it matters for small business owners |
|---|---|---|
| Standard deduction | $16,100 / $32,200 / $24,150 | Affects taxable income projections and how “valuable” additional deductions will be. |
| Bracket thresholds (inflation-adjusted) | Updated for 2026 | Impacts estimates, bonus timing, and whether a big year might push you into higher marginal rates. |
2) Payroll compliance: use the right IRS withholding guidance
If you have employees (or you’re paying yourself via payroll), the IRS Employer’s Tax Guide (Publication 15) remains the core reference for withholding, depositing, reporting, and correcting employment taxes. It also references continued use of Publication 15-T for federal income tax withholding methods. (irs.gov)
South Carolina angle: what Garden City businesses should track
Garden City sits in a high-growth coastal corridor where many businesses run lean teams, juggle seasonal volume, and rely on contractors. That mix can create “quiet” tax risks—especially around estimated payments, withholding, and classification.
South Carolina individual income tax top rate (recent change)
South Carolina’s Department of Revenue indicates the state’s individual income tax structure has a top rate of 6% for tax year 2025 (with brackets adjusted annually). (dor.sc.gov)
Planning takeaway: if your business income passes through to your personal return, your quarterly estimates should reflect both federal and SC expectations—especially in a year where profit jumps or you sell a major asset.
Contractors vs. employees: common coastal-business pain point
If you scale up with seasonal help, misclassification can create back payroll tax exposure. The fix is usually administrative (correct setup, correct forms, correct payroll cadence), but it’s far easier to do before you pay the first check than after a notice arrives.
How to use “current tax law” for better 2026 decision-making
This is a planning workflow used by many well-run small businesses: forecast first, then decide timing, then document decisions.
Step 1: Build a rolling profit forecast (not just a budget)
Start with month-by-month revenue and gross margin. Add payroll (including owner payroll, if applicable), software, rent, and marketing. Then estimate taxes as a line item. When profit moves, your tax picture changes—fast.
Step 2: Sanity-check payroll and withholding settings
Make sure your payroll process matches your reality: correct employee setup, correct pay frequencies, and consistent filings. Publication 15 is still the foundational federal guide for employers. (irs.gov)
Step 3: Plan for estimated tax payments before the busiest months
If your business is seasonal, it’s easy to miss that tax payments don’t care about seasonality. A clean system: (1) forecast annual profit, (2) map estimated payments, (3) set aside cash weekly.
Step 4: Keep deductions “audit-ready” (even if you never get audited)
Pair every meaningful deduction with clean documentation: receipts, business purpose, and categorization. Clean books reduce tax prep costs and make year-end planning decisions (bonuses, equipment, retirement contributions) much easier to model.
Where JTC CPAs fits (and how owners typically use a CPA team)
Many business owners don’t need more spreadsheets—they need a system that runs monthly and informs decisions weekly. A full-service CPA team can support:
Learn more about JTC CPAs’ bookkeeping approach here: Accurate Accounting & Cash Flow Management.
If your main priority is proactive planning, explore: Tax Planning Services.
If payroll is consuming your week, see: Payroll Processing Services.
Call-to-action: get a planning snapshot, not a sales pitch
If you’d like help translating current tax law into decisions for your business—estimated payments, payroll setup, cleanup, and a simple forecast—JTC CPAs can help you build a plan that runs throughout the year.
FAQ
What changed for the 2026 federal standard deduction?
For tax year 2026, the standard deduction is $16,100 (Single/MFS), $32,200 (MFJ), and $24,150 (HOH), per IRS inflation adjustments. (irs.gov)
Do federal bracket changes matter if my business is an LLC or S corp?
Often, yes. Many LLCs (taxed as partnerships or sole props) and S corps pass income through to the owner’s personal return, so individual bracket thresholds and deductions affect estimates and planning.
Where do I find the “official” payroll withholding rules?
The IRS Employer’s Tax Guide (Publication 15) explains withholding, deposits, reporting, and corrections, and points employers to Publication 15-T for withholding methods. (irs.gov)
What is South Carolina’s current top individual income tax rate?
South Carolina’s Department of Revenue lists a top individual income tax rate of 6% for tax year 2025 (with brackets adjusted annually). (dor.sc.gov)
If I’m behind on filings, should I wait until I “have it all organized”?
Usually no. The fastest path is to stabilize: file what’s missing, respond to notices, then improve your monthly bookkeeping process so it doesn’t happen again. If you need help catching up, see: Tax Resolution Services.
