Small business tax preparation checklist for the 2026 tax year

Preparing a small business for tax season comes down to four things, done in this order: close and reconcile your books through December 31, file information returns (1099-NECs are due February 1, 2027, at the new $2,000 threshold), gather the records your preparer needs for deductions and credits, and put every federal and state deadline on the calendar with an extension plan. Two rule changes make the 2026 tax year different from recent ones for startups: domestic research and development costs are deductible again, and the 1099 reporting threshold more than tripled.

This checklist is written for US C-corporations, S-corporations and multi-member LLCs on a calendar year. It isn't tax advice; use it to arrive at your preparer's door organized.

What are the key deadlines for 2026 returns?

February 1, 2027 (Monday): Forms 1099-NEC to contractors and the IRS. The statutory date is January 31, which falls on a Sunday in 2027, so the next business day applies.
March 1, 2027: Delaware annual franchise tax report and payment for Delaware corporations.
March 15, 2027: Form 1065 (partnerships and multi-member LLCs) and Form 1120-S (S-corporations), or an extension on Form 7004.
April 15, 2027: Form 1120 for calendar-year C-corporations (the 15th day of the fourth month after year-end), or Form 7004.
State returns: most follow federal dates, but check each state where you have employees or nexus.

Form 7004 gives an automatic extension of time to file, generally six months. It is not an extension of time to pay. If you expect to owe, estimate and pay with the extension.

Are your books closed and reconciled through December 31?

Your return is only as good as your trial balance. Before anything goes to a preparer:

Every bank, card, loan and payment-processor account reconciled to its December statement.
All transfers between your own accounts matched on both sides. One-legged transfers inflate expenses and liabilities. See bank register vs general ledger.
Uncategorized and 'Ask my accountant' accounts at zero.
Owner contributions, investor money and loan proceeds recorded in equity or liabilities, not revenue.
December payroll, including any accrued but unpaid wages and bonuses, recorded.
Deferred revenue booked for annual plans billed in advance, if you report on accrual.
The year locked once it's final, so nothing moves after your preparer starts.

Which information returns do you need to file?

For payments made after December 31, 2025, the threshold for reporting nonemployee compensation on Form 1099-NEC, and rents on Form 1099-MISC, is $2,000 (it was $600). The threshold is indexed for inflation starting in 2027.

A vendor report of 2026 payments to every unincorporated contractor and landlord.
A Form W-9 on file for each one at or over $2,000.
Payments made by credit card or through a payment network excluded; those are reported by the card network on Form 1099-K instead.
Forms W-2 and the annual payroll filings from your payroll provider, checked against your general ledger wages.

How does the R&D expensing change affect a startup?

This is the biggest change for software companies. For tax years beginning after December 31, 2024, domestic research or experimental expenditures can be deducted again in the year they're paid or incurred (the IRS summarizes this under the 2025 law changes). From 2022 through 2024, those costs had to be amortized over five years using a midpoint convention, which allowed only 10% in the first year. You may instead elect to amortize domestic costs over at least 60 months. Foreign research costs are still amortized over 15 years.

Worked example (hypothetical): a two-founder C-corporation pays $300,000 of US developer salaries in 2026, has $150,000 of revenue and $50,000 of other deductible expenses.

Under the old five-year rule: first-year deduction $30,000. Taxable income = $150,000 − $50,000 − $30,000 = $70,000, or $14,700 of federal tax at the 21% corporate rate.
Under the 2026 rule: full $300,000 deductible. Taxable income = $150,000 − $50,000 − $300,000 = −$200,000, a net operating loss and no federal income tax.

If you amortized costs in 2022–2024, ask your preparer about the transition options in Revenue Procedure 2025-28.

Payroll and contractor costs split between research activities and everything else, with a short description of the projects.
Foreign contractor research costs identified separately.

Are you claiming the R&D credit against payroll tax?

A qualified small business (gross receipts under $5 million for the year and no gross receipts in any year before the five-year period ending with this year) can elect on Form 6765 to apply up to $500,000 of research credit against employer payroll taxes, which is valuable to a pre-profit startup that owes no income tax. The election is made on a timely filed return, and the credit is then claimed on Form 8974 with your quarterly payroll filings.

Ask your preparer whether you qualify, before the return is filed.

What fixed-asset records do you need?

A list of equipment, furniture and other assets bought in 2026, with dates and invoices.
Items under $2,500 per invoice or item identified for the de minimis safe harbor election, if you use it.
Disposals and trade-ins.

For property acquired after January 19, 2025, the 2025 law made 100% bonus depreciation permanent, and Section 179 expensing increased to $2,500,000 for tax years beginning after 2024, so most small companies can deduct most equipment in year one. Whether that's wise depends on whether you have income to offset.

What equity and financing records does your preparer need?

SAFEs, convertible notes and priced rounds: dates, amounts and signed documents. None of it is income. See how to account for SAFEs.
Loan statements showing year-end principal and interest paid.
Stock option grants and any early-exercise or 83(b) elections.

Have you paid estimated tax and handled state obligations?

Confirmation numbers for every 2026 estimated payment, federal and state.
Delaware franchise tax: corporations report by March 1. The minimum tax is $175 under the Authorized Shares method and $400 under the Assumed Par Value Capital method. A startup with millions of authorized shares can receive a five-figure bill under the default Authorized Shares method; recalculate using Assumed Par Value Capital before paying. Late filing costs a $200 penalty plus 1.5% interest per month.
Sales tax filings for any state where you crossed an economic nexus threshold.
State income or franchise tax for every state with employees.

What can you stop worrying about?

Beneficial ownership (BOI) reporting to FinCEN. Entities formerly called domestic reporting companies are exempt; FinCEN first exempted them by interim final rule in March 2025, and the exemption is now final.

How long should you keep the records?

The IRS's general rule is three years from filing, six years if income was underreported by more than 25%, seven years for bad-debt or worthless-securities claims, and at least four years for employment tax records. Keep anything supporting asset basis or equity for as long as you hold the asset, and keep everything indefinitely if a return was never filed.

What makes next year easier?

The businesses that find tax season easy close their books monthly, so December is just another month. Our weekly bookkeeping system is the short version. For deadlines during the year, see the September 15 estimated tax guide.

Sources

IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026)
IRS, Instructions for Form 1120, Form 1065 and Form 7004
IRS, Working Families Tax Cuts provisions (domestic research expenditures) and business provisions (bonus depreciation, Section 179); Rev. Proc. 2025-28
IRS, Instructions for Form 6765 (payroll tax election, qualified small business)
IRS, Tangible property final regulations (de minimis safe harbor)
Delaware Division of Corporations, Franchise taxes
FinCEN, Beneficial ownership information
IRS, How long should I keep records?