At Vogt Tax & Accounting, we believe staying informed is one of the best ways to make confident financial decisions. With changes to retirement savings opportunities and business tax reporting requirements taking effect in 2026 and 2027, we want to make sure you have the information you need to plan ahead and avoid surprises.
This month, we’re highlighting three important updates that may affect you, your family, or your business. We’ll explore the new federal retirement savings initiatives, including the potential for government matching contributions, as well as the increased 1099 reporting thresholds and what they mean for business owners and independent contractors. For business owners, we touch on year-end tax strategies such as retirement plan optimization and entity structuring, ensuring you’re informed on potential tax savings that are commonly missed before December 31st.
Whether you're thinking about your long-term financial future or simply trying to keep your business organized and compliant, understanding these changes can help you make the most of available opportunities.
As always, our team is here to help you navigate the details and understand how these updates apply to your unique situation. Thank you for trusting Vogt Tax & Accounting to be part of your financial journey. We appreciate the opportunity to serve you!
Understanding the New “Trump IRA” & Federal Saver’s Match
Many taxpayers have heard discussions about the new “Trump IRA” initiative, but few understand how it works or whether they qualify. While much of the attention has focused on Trump Accounts for children, a separate retirement initiative was established to help working Americans save for retirement through Individual Retirement Accounts (IRAs). The program is intended to connect workers with low-cost IRA options and help eligible taxpayers receive a federal matching contribution.
What is the Trump IRA?
The Trump IRA initiative is centered around TrumpIRA.gov, a federal platform designed to help workers compare and enroll in qualifying low-cost IRAs offered by private financial institutions. The website is intended to be particularly useful for individuals who do not have access to an employer-sponsored retirement plan such as a 401(k).
The program emphasizes:
· Independent contractors
· Gig workers
· Self-employed individuals
· Part-time employees
· Small business employees without workplace retirement plans
These taxpayers often lack access to matching contributions that are commonly available through employer-sponsored retirement plans.
How Does the Government Match Work?
One of the most attractive features of the program is the Federal Saver’s Match. Beginning in 2027, eligible taxpayers may receive a federal contribution of up to $1,000 annually when they make qualifying retirement contributions.
The Saver’s Match is based on retirement contributions made by eligible workers and is intended to encourage retirement saving among lower- and middle-income taxpayers. Rather than receiving a non-refundable tax credit, qualifying individuals may receive a matching contribution deposited directly into their retirement account.
Who Qualifies?
Single Filers
· Full Match (50%): MAGI under $20,500
· Partial Match: MAGI between $20,500 and $35,500
· No Match: MAGI over $35,500
Married Filing Jointly
· Full Match (50%): MAGI under $41,000
· Partial Match: MAGI between $41,000 and $71,000
· No Match: MAGI over $71,000
Head of Household
· Full Match (50%): MAGI under $30,750
· Partial Match: MAGI between $30,750 and $53,250
· No Match: MAGI over $53,250
The amount of the matching contribution is subject to applicable IRS rules and eligibility requirements.
How Could This Affect Your Taxes?
1. Potential Tax Deduction
Taxpayers contributing to a Traditional IRA may be eligible for an income tax deduction, depending on their circumstances and participation in other retirement plans.
A deductible IRA contribution can reduce adjusted gross income and potentially lower overall federal income taxes.
2. Additional Federal Contribution
Eligible taxpayers may receive up to $1,000 from the federal government through the Saver’s Match program. This amount goes directly into the retirement account rather than receiving as a tax credit.
3. Long-Term Tax-Deferred Growth
Assets held within a Traditional IRA generally grow on a tax-deferred basis until distributions are taken. This allows investments to compound without annual taxation on earnings.
4. Opportunity for Self-Employed Individuals
Many business owners and independent contractors focus heavily on current-year tax saving while neglecting retirement planning. The combination of potential IRA deductions and a federal matching contribution creates an additional incentive to begin saving.
Final Thoughts
The Trump IRA initiative represents a significant effort to increase retirement savings among workers who do not have employer-sponsored retirement plans. For self-employed individuals, gig workers, and employees of small businesses, the potential combination of IRA tax benefits and a federal match may create a valuable retirement planning opportunity.
As additional guidance is released, taxpayers should evaluate whether they qualify for the Saver’s Match and determine whether Traditional or Roth IRA contributions fit into their overall tax strategy.
If you would like assistance evaluating your eligibility or retirement contribution options, please feel free to contact our office. We’d be happy to discuss how these changes may affect your tax situation.
Important Changes to 1099 Reporting Requirements
What business owners and independent contractors need to know
Several important changes to IRS reporting requirements took effect on January 1, 2026, that may affect business owners, independent contractors, and other taxpayers who make or receive business payments.
The reporting threshold for certain Forms 1099 has increased from $600 to $2,000. This change, enacted under the One Big Beautiful Bill Act, is intended to simplify reporting requirements for certain business transactions.
While this adjustment may reduce the number of forms businesses are required to issue, it is important to understand what has changed and what responsibilities remain.
Which Forms Are Affected?
The increased threshold primarily applies to the following forms:
· Form 1099-NEC: Used to report payments of $2,000 or more to independent contractors and other nonemployees for services performed in the course of business.
· Form 1099-MISC: Used to report certain payments of $2,000 or more, including rents, prizes and awards, other income, and medical and health care payments.
Not all 1099 reporting requirements have changed. Certain payments, including royalties and gross proceeds paid to attorneys, remain subject to different reporting thresholds. Special rules and exceptions may also apply.
What Does This Mean for Business Owners?
Under the new rules, if your business pays an independent contractor less than $2,000 during the 2026 calendar year, you generally will not be required to issue a Form 1099-NEC for those payments, provided no other reporting requirement applies.
However, this does not mean businesses can stop tracking payments to contractors or vendors.
We recommend continuing to:
· Collect completed Forms W-9 from contractors and vendors.
· Maintain accurate records of all business payments throughout the year.
· Track payments by vendor to determine whether reporting thresholds have been met.
· Review payment methods, as certain payments processed through credit cards or third-party payment networks may be subject to different reporting rules.
Maintaining organized records will help ensure your business is prepared for tax season and remains compliant with applicable IRS requirements.
Does This Change Whether Income Is Taxable?
No. This is an important distinction.
The increased reporting threshold does not change whether income is taxable. Independent contractors and other recipients must continue reporting all applicable taxable income, regardless of whether they receive a Form 1099.
For example, if a contractor earns $1,500 from a business during 2026 and does not receive a Form 1099-NEC, that income is still generally required to be reported on their tax return.
The change affects the payer's information-reporting obligation, not the recipient's responsibility to report taxable income.
Looking Ahead: Annual Inflation Adjustments
The $2,000 threshold will be adjusted annually for inflation beginning in 2027. This means the reporting threshold may increase in future years, making it important for businesses to stay informed as IRS guidance evolves.
How Vogt Tax & Accounting Can Help
Changes to tax reporting requirements can create questions about what your business needs to track, report, and retain. Our team is here to help you understand how these updates apply to your specific circumstances and ensure you are prepared for the upcoming tax season.
As always, we encourage you to reach out to our office if you have questions about contractor payments, 1099 reporting, or your business's recordkeeping practices.
Year-End Tax Strategies Every Business Owner Should Consider (With Entity-Specific Guidance)
As we approach year-end, business owners have a valuable opportunity to implement tax-saving strategies before December 31. Below is a refined list along with clear guidance on which entity types each strategy applies to: Schedule C (Sole Proprietors), S Corporations, C Corporations, and Partnerships.
Excellent Bookkeeping
Accurate books don’t directly reduce taxes, but they ensure every deduction is captured and allows for appropriate planning. This is crucial for all entity types. Clean records make tax planning possible – messy books make it impossible.
Applies to: All entity types
Entity Structure & Compensation Review
Your entity type and how you pay yourself can dramatically affect payroll taxes, self-employment taxes, and the Qualified Business Income (QBI) deduction.
Applies to:
· Schedule C: Subject to full self-employment tax
· S Corporations: Salary vs. distributions planning
· Partnerships: Guaranteed payments vs. distributive share
· C Corporations: Salary vs. dividends consideration
A year-end review can prevent thousands of unnecessary payroll or self-employment taxes.
Retirement Plan Optimization
Often the single most powerful year-end tax strategy. Business owners can shelter tens – or even hundreds of thousands by paying themself through:
· 401(k) or Solo 401(k)
· IRAs: Traditional, Roth, SEP, Simple
· Defined Benefit (DB) Plan
· Cash Balance plan
Applies to: All entity types, with contribution limits varying based on W-2 wages or net earnings. Current tax law allows for dollar-for-dollar credit for some employer contributions. Let the IRS fund your retirement.
Year-End Purchases & Income Deferral
Cash-basis business owners can accelerate deductions by purchasing needed equipment, vehicles, or supplies before year-end. You can also delay invoicing until January to push income into next year. However, avoid a loss situation by deferring too much income or accelerating too many expenses. Excellent bookkeeping throughout the year is key.
Applies to: Schedule C, S Corporations, C Corporations, and Partnerships (cash-basis only).
Augusta Rule
Rent your home to your business for up to 14 days per year and deduct the rent while excluding the income personally. The policy must be properly documented, or the expense is invalid.
Applies to: S Corporations, C Corporations, and Partnerships.
Does not apply to: Schedule C (Sole Proprietors) – Business and Individual are the same taxpayer.
Accountable Plan
If you’re paying business expenses personally – mileage, travel, meals, home office, cell phone, internet – an accountable plan allows the business to reimburse you tax-free while taking a deduction.
Applies to: S Corporations & C Corporations (Critical), Partnerships (with special rules).
Does not apply to: Schedule C (owners already deduct directly)
Optimize Health Insurance Deductions
Business owners often miss out on tax-favored health strategies:
· HSAs/HRAs
· S-Corp Shareholder Premium Rules
· C-Corp Medical reimbursement plans
Applies to:
· Schedule C: HSAs & HRAs
· S Corporations: Special shareholder rules
· C Corporations: Broad HRA options and medical reimbursement plans
· Partnerships: Premiums deducted on partner K-1s
Hiring Family Members
Paying children or family members for legitimate work shifts income to lower tax brackets and allows them to fund Retirement accounts. There are also special rules to avoid self-employment tax for some children in schedule C businesses.
Applies to: Schedule C, S Corporations, C Corporations, and Partnerships.
State Tax Planning in Light of the New SALT Limitations
With the SALT deduction limit now significantly higher, the Pass-Through Entity (PTE) election is no longer universally beneficial. It still matters for:
· Owners in high-tax states
· High income owners that are subject to SALT Limitations
Applies to: S Corporations and Partnerships.
Final Thoughts
Year-end tax planning works best when it’s intentional, timely, and tailored to your specific situation. While each of these strategies can create meaningful savings on its own, the real value comes from combining the right approaches based on your entity type, income level, and long-term goals. Every business is different, and the tax code rewards those who plan rather than react. The most effective way to save on taxes before year-end is to sit down with us so we can customize a tax strategy specifically for you.
This newsletter is for general informational purposes only and is not tax, legal, or financial advice. Your situation is specific to you. Talk with us before acting on anything here.