Key 2026 Tax Updates Every Outdoor Gear Store Needs to Know
- Jacob Curtis
- 3 days ago
- 5 min read
What changed, what ends, and how to plan—Profit First style
Introduction: 2026 Is a Big Year for Small Businesses
If you own an outdoor recreation or sporting goods store, 2026 is shaping up to be one of the biggest tax years in recent memory. New laws are kicking in, old ones are expiring, and a few surprise extensions will change how you plan and pay.
But here’s the good news: when you plan diligently, you profit intentionally. Proverbs 21:5 reminds us, “The plans of the diligent certainly lead to profit.”
That’s what this guide is all about — turning complex tax talk into simple, strategic actions that protect your cash flow and keep your store thriving.
1. Individual and Pass-Through Tax Rates Stay Lower
The 2025 legislation extended today’s lower individual tax brackets into 2026. That’s great news for S-corporations, partnerships, and sole proprietors — since your business profit flows straight to your personal return.
Action Plan:
Review and adjust your withholdings or quarterly estimated payments now, not in April.
Update your Profit First tax allocation percentages to reflect the year’s actual income.
Keep using your dedicated Tax Account so you’re always ahead of payments.
2. QBI Deduction Continues (With a Catch)
The 20% Qualified Business Income (QBI) deduction remains in effect for most pass-through entities — a major win for small business owners.
However, staying eligible means balancing how you pay yourself and report assets. If you pay too little in wages or mismanage distributions, you could lose part of this deduction.
Profit First Tip: Keep clean records for your wages and distributions, and coordinate with your CPA before year-end to confirm your structure protects both your QBI and cash flow.
3. SALT Deduction Gets Breathing Room
The state and local tax (SALT) deduction cap has been raised through 2029, which helps owners in high-tax states — especially those using pass-through entity (PTE) elections.
This can add up to real savings for retailers with brick-and-mortar locations or warehouse facilities.
Action Plan:
Review your state’s PTE election opportunities.
Coordinate with your CPA before the next filing cycle.
Don’t mistake a higher deduction for a spending excuse — stewardship still starts with discipline.
4. 1099-K Reporting Returns to $20,000/200 Transactions
If you sell through Shopify, Etsy, or other online marketplaces, this is big: the 1099-K threshold has reverted to $20,000 and 200 transactions.
While this simplifies reporting for many sellers, your data must match the platforms’ records.
Action Plan:
Reconcile your Shopify and bank deposits monthly.
Track refunds and chargebacks so year-end forms don’t misstate your income.
Remember: stewardship happens in the details.
5. First-Year Write-Offs Are Back
The law restored 100% bonus depreciation, allowing you to immediately expense qualifying purchases like fixtures, racks, or new POS systems placed in service in 2026.
Key Reminder: Never buy just for a deduction — buy for productivity.
Action Plan:
Plan upgrades intentionally and align them with your cash flow rhythm.
Keep documentation for asset purchases and placements in service.
Coordinate with your accountant to maximize bonus depreciation and §179 expensing.
6. Section 179 Expensing Gets a Boost
Section 179 is perfect for smaller, everyday investments — shelving, computer upgrades, and retail equipment. With higher limits and phase-out thresholds, you now have more flexibility to expense assets fully instead of depreciating them.
Profit First Tip: Your Inventory and Operating Expense Accounts should always guide these purchases — not impulsive “it’s deductible” thinking.
7. Energy and Tip Credits Are Changing
Certain energy incentives phase down after 2025, and the tip credit has been reshaped for stores with staff who handle both service and retail duties.
Action Plan:
Review your store’s energy improvements and service staff classification now.
Don’t wait until March — update payroll codes early so you don’t miss credits you’re eligible for.
8. Estate and Succession Planning Remains Critical
With the estate tax exemption holding near $15 million per person, there’s still room for strategic gifting and succession planning.
Even if your brand isn’t there yet, succession planning ensures your store’s legacy — and your family’s peace of mind — are protected.
Action Plan:
Keep ownership documents, wills, and beneficiary designations current.
Review transfer-on-death accounts and life insurance beneficiaries annually.
Build your store to outlast your leadership — not depend on it.
9. The Profit First Tax Rhythm for 2026
Peace in business comes from rhythm — not reaction. The Profit First system helps store owners stay consistent even in unpredictable seasons.
Here’s your 2026 rhythm:
Use six accounts: Income, Inventory, Profit, Owner’s Pay, Tax, and Operating Expenses.
Allocate twice per month (10th and 25th) based on real percentages.
Adjust quarterly as your numbers change.
When tax season arrives, your money’s already there — and so is your peace of mind.
10. Your 30-Day Action Checklist
Here’s what to tackle this month:
✅ Update 2026 income tax estimates
✅ Review your QBI and SALT impact
✅ Map capital purchases by cash flow cycle
✅ Reconcile your 2025 online sales
✅ Schedule your Profit First advisory session
Don’t drift — decide. Small, proactive steps now prevent big headaches later.
Mini Case Study: “Summit Outfitters”
Last year, Summit Outfitters (a mid-sized outdoor gear retailer) reinvested aggressively to expand locations. Their growth looked great on paper — until a surprise $90,000 tax bill hit in April.
After implementing Profit First with a 15% tax allocation and aligning payroll with QBI rules, they closed 2025 with predictable quarterly payments and a $25,000 profit reserve.
The owner’s comment:
“For the first time, tax season didn’t scare me — because I’d already paid for it.”
Frequently Asked Questions
How will the 2026 tax updates affect S-Corp owners specifically?
S-Corp owners benefit from the extended lower brackets and continued QBI deduction but should carefully balance wages and distributions to avoid deduction limits.
What happens if I sell through multiple platforms?
Track gross sales by channel monthly and reconcile to your bank deposits. Each platform may issue a separate 1099-K.
Should I buy new equipment before year-end to maximize deductions?
Only if it improves productivity or efficiency. Don’t spend $10,000 to save $2,000 in taxes — align every purchase with your Profit First allocations.
What’s the easiest way to avoid a surprise tax bill in 2026?
Open a dedicated Tax Account, transfer 15–20% of profit twice monthly, and review it quarterly with your CPA.
Call to Action
If these 2026 changes feel overwhelming, you don’t have to face them alone.
At Curtis Accounting Solutions, we help outdoor recreation and sporting goods brands build Profit First cash flow systems that make tax season stress-free and predictable.
→ Book your Free Profit & Cash Flow Analysis
We’ll walk through your numbers and show you exactly how to prepare for 2026 — without the tax-time panic.
“The plans of the diligent certainly lead to profit.” — Proverbs 21:5
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