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    <title>KDM Accounting Services Inc — Blog</title>
    <link>https://kdmfinancialfl.com/blog/</link>
    <description>S-Corp tax, bookkeeping, payroll, and IRS notice response — practical notes for small to medium business owners from KDM Accounting Services Inc, practicing since 1989.</description>
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    <copyright>© 2026 KDM Accounting Services Inc. All rights reserved.</copyright>
    <managingEditor>kdmfinancialsolutions@gmail.com (KDM Accounting Services Inc)</managingEditor>
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    <pubDate>Fri, 12 Jun 2026 00:00:00 GMT</pubDate>
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      <title>What&apos;s new for 2026: the OBBBA tax changes every South Florida S-Corp owner should act on before year-end</title>
      <link>https://kdmfinancialfl.com/blog/2026-obbba-changes-south-florida-business-owners/</link>
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      <pubDate>Fri, 12 Jun 2026 00:00:00 GMT</pubDate>
      <dc:creator><![CDATA[KDM Accounting Services Inc]]></dc:creator>
      
      <description><![CDATA[2026 is the first full year under the One Big Beautiful Bill Act: new tips, overtime, car-loan and senior deductions on Schedule 1-A, permanent 100% bonus depreciation, a higher Section 179 cap, a permanent QBI deduction, and a FinCEN rule that exempts most U.S. companies from BOI reporting. What South Florida S-Corp owners should do now.]]></description>
      <content:encoded><![CDATA[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. p]]></content:encoded>
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      <title>IRS interest rates climb back to 7% on July 1. Here&apos;s what S-Corp owners should do before then.</title>
      <link>https://kdmfinancialfl.com/blog/irs-interest-rates-rising-july-2026/</link>
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      <pubDate>Thu, 28 May 2026 00:00:00 GMT</pubDate>
      <dc:creator><![CDATA[KDM Accounting Services Inc]]></dc:creator>
      
      <description><![CDATA[Rev. Rul. 2026-10 raises Q3 2026 IRS interest rates one point — individual underpayments to 7%, large-corp to 9%. Practical moves for S-Corp owner-operators before the July 1 effective date.]]></description>
      <content:encoded><![CDATA[The IRS published **Rev. Rul. 2026-10** in Internal Revenue Bulletin 2026-22 on May 26, with a corresponding Federal Register notice dated May 18. Effective July 1, 2026, quarterly interest rates for underpayments climb back up one point — fully reversing the small Q2 cut. If you owe estimated tax, if you're carrying a CP14 balance, or if you've been thinking about a year-end W-2 catch-up to true up reasonable compensation — the cost of waiting just went up. ## What changed For the Q3 2026 calendar quarter (July 1 through September 30): - **Individual underpayments:** 7% (was 6% in Q2) - **Individual overpayments / refunds:** 7% - **Corporate underpayments:** 7% (was 6%) - **Large corporate underpayments under §6621(c):** 9% (was 8%) - **Corporate overpayments over $10,000:** 4.5% - **§6603 cash deposits:** 4% The rates are set by formula under IRC §6621 based on the federal short-term rate determined during the prior month. The April 2026 determination came in at 4% (rounded), up from 3% in January — that one-point jump in the short-term rate is what drove the one-point hike in IRS rates. All interest compounds **daily** under IRC §6622. The annual rate is just the headline; the actual cost is calculated and added every single day. ## Why this matters for S-Corp owner-operators Three places this lands hardest. ### Q1 and Q2 estimated-tax shortfalls Anyone who under-paid in April or hasn't yet sent the June 15 payment is accruing interest on the gap. From July 1 forward, that gap accrues at 7% instead of 6%. On a $10,000 underpayment carried for the back half of the year, the rate increase costs roughly $50 — small per case, but it stacks across the book. ### Open balances from prior-year returns If you got a CP14 (balance due) or a CP504 (final-notice-before-levy) on a return we prepared, the underpayment-interest meter accelerates on July 1. Settling before then locks in the lower Q2 rate; everything after compounds at the higher rate. ### Year-end W-2 catch-ups for reasonable compensation A common S-Corp strategy is to under-pay yourself on payroll through the year, then run a big December bonus to hit the reasonable-comp target. That works — but the deferred payroll-tax cost is, in effect, an interest-bearing position. With Q3 rates one point higher, that defer-and-true-up math is one point less profitable. Worth running the numbers if you've been pushing the catch-up later. ## The next deadline **Q2 2026 estimated taxes are due Monday, June 15, 2026.** June 15 falls on a Monday this year — there is no weekend shift, and the deadline is hard. Several secondary sources have been incorrectly reporting a shift to June 16; ignore them. If you've been carrying a notional shortfall waiting to settle, June 15 is the last full payment that lands inside the lower Q2 rate window. Everything you delay past July 1 starts compounding at the new 7%. ## Three concrete moves before July 1 ### 1. Make the June 15 payment on time, in full If you've been short on Q1, this is the catch-up moment. EFTPS, IRS Direct Pay, or your tax software's estimated-payment workflow all work; the IRS doesn't reward you for paying early but it absolutely penalizes you for being late. ### 2. If you owe from 2025, settle before July 1 This applies to balances from a return that's already been filed, including amounts on CP14/CP504 notices. The full balance accrues at the lower Q2 rate until June 30, then jumps. Paying down even a partial balance before then saves real interest dollars. ### 3. If you under-paid reasonable comp through Q1–Q2 planning to catch up at year-end, run the numbers now The deferred-payroll position is one point more expensive starting July 1. The right move depends on cash flow, your reasonable-comp memo, and your basis position — but knowing the cost of waiting is the first step. If we prepare your 1120-S, this is the conversation we'd have on a planning call. ## What we do — and what we don't We prepare 1120-S returns, K-1s, reasonabl]]></content:encoded>
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