7 Tax Moves Self-Employed Professionals Should Make Before Year-End Under the OBBBA

7 Tax Moves Self-Employed Professionals Should Make Before Year-End Under the OBBBA

The One Big Beautiful Bill Act changed the math on self-employed tax planning for 2026 in ways that are more significant than most people realize. Under the OBBBA, the QBI deduction is now permanent. Bonus depreciation is back at 100%. The phase-out ranges have widened. The calculus on S-corp elections looks different than it did two years ago.

If your tax plan is still based on pre-OBBBA assumptions — or worse, on the "it might sunset" uncertainty that defined 2024 and 2025 planning — you may be leaving real money on the table between now and December 31.

These seven moves apply to self-employed professionals with at least $150,000 in net income. The higher your income, the more each one is worth.

1. Maximize the QBI Deduction Before You Hit the Phase-Out Range

Under IRC §199A as made permanent by the OBBBA, the qualified business income deduction lets self-employed individuals deduct up to 20% of qualified business income from taxable income. The prior sunset provision is gone.

The OBBBA also widened the phase-in ranges — from $50,000 to $75,000 for single filers and from $100,000 to $150,000 for joint filers. For 2026, the taxable income threshold where that range begins sits at roughly $201,775 for single filers and $403,550 for joint filers, per the IRS's annual inflation adjustments. Below the threshold, you get the full 20% deduction without restriction. Above it, specified service trade or business (SSTB) limitations phase in — meaning consultants, attorneys, financial professionals, and other service providers start losing the deduction as income rises through the range.

If your taxable income is near the threshold, deductions taken before year-end — retirement contributions, health insurance premiums, expense timing — can keep you inside the full-deduction range.

The math: a single-filer consultant with $230,000 in taxable income is partway through the phase-out and losing a slice of a deduction worth up to $46,000 (20% of $230,000). Pulling taxable income back under roughly $201,775 with a solo 401(k) contribution can restore the full deduction — potentially worth several thousand dollars in federal tax, depending on your bracket and state. Verify the exact thresholds with your CPA; they adjust annually for inflation.

2. Fund a Solo 401(k) to the 2026 Contribution Limits

For 2026, solo 401(k) employee deferrals max out at $24,500, per IRS Notice 2025-67. Employer profit-sharing contributions can add up to 25% of net self-employment earnings, with a combined limit of $72,000 (more if you're 50 or older and making catch-up contributions).

That's potentially $72,000 removed from taxable income in a single year. For a self-employed professional in the 32% federal bracket, the federal tax savings alone on a fully funded solo 401(k) can exceed $23,000 — though the actual benefit depends on your income, filing status, and the QBI interaction below.

There's a compounding effect with the QBI deduction. Solo 401(k) contributions reduce net SE income, which reduces QBI — which in turn affects the 20% deduction calculation. The interaction requires running the numbers both ways, because in some scenarios the retirement contribution has an effective tax rate of 40%+ when the QBI reduction is factored in. The planning is worth doing carefully, not just defaulting to "fund the maximum."

3. Time Equipment Purchases for 100% Bonus Depreciation

The OBBBA restored 100% bonus depreciation and made it applicable to both new and used qualifying property. For a cash-basis self-employed professional, this means a piece of equipment purchased before December 31, 2026 can be fully deducted in 2026 — rather than depreciated over 5 or 7 years under Section 179 or MACRS.

If you've been deferring equipment purchases — computers, office furniture, vehicles used for business, production equipment — the depreciation math now favors accelerating that purchase before year-end if you want to reduce 2026 taxable income.

The distinction from Section 179: bonus depreciation isn't capped by an annual dollar limit and isn't limited to your business income the way Section 179 expensing is. For most solo practitioners buying a laptop or a desk, the practical difference is minimal — but for larger purchases or loss years, the right treatment matters. Confirm it with your CPA given your specific asset type, and remember that accelerating a deduction into 2026 means giving up that depreciation in future years.

4. Model an S-Corp Election if You Haven't Recently

The S-corp election math has changed meaningfully now that the QBI deduction is permanent.

An S-corp structure lets self-employed professionals split income between a reasonable salary (subject to payroll taxes) and distributions (not subject to self-employment tax). On $300,000 of net income, shifting $150,000 into distributions instead of salary can save roughly $10,000–$15,000 in self-employment taxes annually — though the IRS requires the salary portion to be reasonable for your role, and S-corps add payroll, filing, and compliance costs that eat into the savings.

Before the OBBBA's permanence, the QBI deduction was scheduled to sunset in 2025, which made the S-corp analysis more conservative — why restructure for a deduction that might disappear? Now that both the payroll tax savings and the QBI interaction are stable variables, the long-term case for an S-corp election is clearer for self-employed professionals earning above $150,000.

An S-corp election for 2027 generally requires filing Form 2553 by March 15, 2027. Planning that decision now means you have time to model the tax savings correctly rather than rushing the analysis in Q1.

5. Prepay Deductible Business Expenses Before December 31

If you're a cash-basis taxpayer — which most sole proprietors and single-member LLCs are — expenses are deductible when paid, not when incurred. That means a business expense paid on December 31, 2026 reduces your 2026 taxable income.

If you expect 2027 income to be lower than 2026, accelerating deductible expenses into 2026 can work as straightforward tax arbitrage. Prepay your business software subscriptions, professional development expenses, office supplies, and any other deductible line items you'd be paying in January anyway. (If 2027 income will be higher, the same logic runs in reverse — timing only helps when you know which direction your bracket is moving.)

The OBBBA's permanent QBI deduction adds a second-order benefit: those prepaid deductions reduce 2026 QBI, which may keep you inside the phase-in range for the full 20% deduction — creating a deduction on top of a deduction. Not every dollar of additional deduction has this compound effect, but modeling it with your CPA before year-end is worth the conversation.

6. Review Your Health Insurance Deduction Treatment

Self-employed individuals can deduct 100% of health insurance premiums — for themselves, their spouse, and dependents — as an above-the-line deduction. This reduces adjusted gross income, which in turn affects QBI eligibility thresholds.

The deduction has one important constraint: you cannot deduct premiums for any month in which you were eligible for employer-subsidized coverage through a spouse's employer. If your situation changed during the year — a spouse took or left a job — your eligible deduction months may have changed.

The AGI impact is the key planning lever. Every dollar of health insurance premium that reduces your AGI also potentially keeps you further inside the QBI deduction phase-in range. For a professional at $160,000 in net SE income with $18,000 in annual health insurance premiums, the above-the-line deduction may keep them entirely within the full QBI deduction range for a combined tax benefit well above the premium cost.

7. Audit Your Estimated Tax Payments Before Q4

The permanent QBI deduction changes your effective federal rate. If your Q1–Q3 estimated tax payments were calculated without it — or calculated based on last year's income before the OBBBA passed — you may have overpaid significantly, or you may need to adjust Q4 to avoid underpayment penalties.

The safe harbor for estimated taxes is 100% of prior year tax liability (110% if your prior year AGI was above $150,000). If the OBBBA reduced your 2026 liability materially versus 2025, your safe harbor payment may be higher than your actual 2026 liability — meaning Q4's payment could be reduced without penalty risk.

Run the projection before Q4's payment is due. If you've been paying based on prior-year safe harbor and your current-year liability is lower because of QBI and bonus depreciation, you have an opportunity to keep that cash until April rather than sending it to the IRS in September.

Tax Strategy Is Where CPA on Fire Lives

These moves exist in the tax code. Executing them requires a CPA who does active planning, not just return prep.

The difference between a CPA who files your return and a CPA who calls you in October to talk through Q4 moves can be five figures in taxes for a self-employed professional at this income level — depending on your situation. None of the seven moves above work retroactively, which is exactly why the conversation has to happen before December 31, not in April.

CPA on Fire on Sam's List does concierge tax strategy for self-employed professionals. If you want someone who actually engages with your situation before year-end — not just after it — visit their Sam's List profile and reach out for a planning conversation.