Preparing for 2026 Tax Season: Practical Steps for Oregon Small Businesses (Part 2)
As 2025 winds down, this is the ideal time to start preparing your business for a successful 2026. In the Part 1 of my Getting Your Business Ready for the New Year series, we explored Year-End Review and Reconciliation.
Today, in Part 2, we will focus on Preparing for Tax Season.
Preparing for Tax Season
Tax season can feel challenging, but early preparation turns it into a chance for clarity and optimization—especially for Oregon small business owners balancing federal and state rules. From my experience in finance and process improvement, I've seen how organized records lead to better outcomes. Strong books from year-end make this easier, highlighting deductions and trends. Here's an actionable step-by-step guide:
Gather and Organize Key Documents — Collect 2025 records like W-2s/1099s (due January 31, 2026), income statements, bank statements, receipts, mileage logs, and payroll reports. Use digital folders or tools like QuickBooks to categorize and prevent losses.
Categorize Expenses and Track Deductions — Review for deductions such as home office, vehicle use, supplies, meals (50% deductible), travel, and health insurance (for self-employed). Take advantage of recent updates, including 100% bonus depreciation for qualifying assets placed in service after January 19, 2025 (made permanent via the One Big Beautiful Bill Act), and the permanent 20% Qualified Business Income (QBI) deduction—with a new $400 minimum starting in 2026 for active businesses with at least $1,000 in QBI.
Handle Payroll and Contractor Forms — Issue W-2s to employees and 1099-NEC forms to contractors paid $600+ by January 31, 2026. Verify withholdings and compliance with Oregon paid leave and unemployment taxes.
Review Credits and Incentives — Check federal credits (e.g., R&D if applicable) and Oregon-specific options like Enterprise Zones. For pass-through entities, confirm QBI eligibility for up to 20% reduction in taxable income.
Understand Oregon-Specific Requirements — Oregon bases taxes on federal AGI (rates 4.75%–9.9%), with potential Corporate Activity Tax (CAT) if commercial activity exceeds $1 million. No general sales tax exists, but monitor local lodging or prepared food taxes in areas like Portland or Bend.
Meet Key Deadlines — Most individual/sole proprietor returns due April 15, 2026; partnerships/S-corps March 16, 2026. Extensions are available (pay owed taxes by original deadline to avoid penalties). Estimated payments: January 15, 2026, for Q4 2025.
Consult a Professional for Complex Items — Basic organization is straightforward, but items like depreciation, QBI calculations, or multi-state rules often benefit from CPA guidance to maximize benefits and compliance.
These steps promote compliance while revealing insights—ways to reduce liability, boost cash flow, and support scaling. Solid preparation builds confidence, letting you focus on what you love. In Part 3, we’ll cover Budgeting for Growth.
Need help bringing this to life? I'm Sanjay Reddy, founder of Willamette Way Bookkeeping & Consulting™. I partner with fellow Oregon small business owners, drawing on 32 years in finance, operations, and Lean process improvement to clean your books and streamline your systems.
Clean books → clear insights → less waste → confident growth.
I handle the numbers and systems. You focus on doing what you love—better.
Ready to find a better way together? Schedule a free consultation. Let’s talk: www.willametteway.com.
