Tax Return Changes for S Corporation Owners | HelloBooks QBI thresholds and the $400 minimum, the SALT cap phase-down, full expensing and the loss limit. What S corporation owner clients need for 2026.
S corporation owners feel the business changes on their own 1040s, through the K-1. Planning has to look at both returns together.
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QBI threshold 2026 (joint)
$403,500
Applies: Tax years 2025 and 2026From IRS.gov · checked October 10, 2026
The QBI deduction continues, with 2026 thresholds of $201,750 single and $403,500 joint, where the wage limit begins to apply. Shareholder wages paid by the S corporation affect that limit, so reasonable compensation and QBI planning go together.
Full expensing and the 2026 Section 179 limit of $2,560,000 pass through to shareholders, who may then hit the excess business loss limit of $256,000, or $512,000 joint.
Keep shareholder distributions, loans and wages in separate accounts, so basis tracking and reasonable compensation are clear. With the books kept current in HelloBooks, the owner’s reports give you the inputs for a year-end projection without a scramble.
The plain-English summary for business owners
Business returns · Form 8995
Business returns · loss limits
By client type · partnerships and LLCs
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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