Seven questions that arrive in my inbox every single week — answered straight, with current numbers and zero upsell.
By Foad Nabi, EA · Enrolled Agent · June 2026
I’m Foad Nabi, an Enrolled Agent, and certain questions arrive in my inbox so reliably that I can set the calendar by them. Here are the seven I hear most from small business owners — with the 2026 answers, the short version first, and links to the deep dives where the details live.
25–30% of profit is the right reflex for most self-employed people — it covers the 15.3% self-employment tax plus federal income tax at typical brackets; nudge higher in a state with income tax. The mechanics that make it painless: a separate savings account, funded the day money lands. Then make the quarterly payments penalty-proof with the safe harbor — pay 100% of last year’s total tax in four installments (110% if you earned over $150k). Full walkthrough: estimated taxes for freelancers.
Maybe — but not for the reason you’ve heard. An LLC does nothing to your federal taxes; it’s liability protection, and only if you keep business and personal money strictly separate. Physical-risk businesses, employees, leases, debt: yes. Laptop consultant with good insurance: often no. The unsold version: LLC vs sole proprietorship.
When the employment-tax savings beat the added costs — usually somewhere past $60–80k of steady profit, with a salary you could defend to the IRS as reasonable. Below that, the payroll service and extra return eat the savings. Don’t take my word for it: the free calculator runs your actual numbers against the 2026 wage base, and it will happily tell you “not yet.”
The business-use portion, yes — by one of two methods. Standard mileage is 72.5¢ per business mile in 2026; actual expenses (fuel, insurance, repairs, depreciation) often wins for expensive-to-run trucks. The non-negotiable either way is a contemporaneous mileage log — reconstructed logs are where this deduction goes to die in audits. Worked examples: mileage vs actual.
No — that’s folklore. If a space is used exclusively and regularly for business and you do your admin there, claim it. Simplified method: $5/sq ft up to $1,500. Regular method: business % of actual housing costs, usually worth more for renters. What is true: W-2 employees can’t take it at all anymore. Details: the home office deduction in 2026.
If you paid an unincorporated person or business $2,000 or more for services in 2026 — yes, by February 1, 2027. (The threshold was $600 for years; the One Big Beautiful Bill Act raised it starting with 2026 payments.) The trick is collecting the W-9 before the first payment, while you still have leverage. There’s a free tracker that flags who needs a form automatically.
Open a separate business bank account if you don’t have one, and connect it to your bookkeeping software’s bank feed. Every expensive problem I cleaned up in my resolution years — every single one — ran through commingled accounts or abandoned books. Fifteen minutes a week of feed review prevents nearly all of it. The system: bookkeeping basics.
If there’s a tax or bookkeeping question you can’t find a straight answer to, send it to me. I read every message, and the recurring ones become articles like this.
Foad is a federally licensed Enrolled Agent who writes about tax and bookkeeping for small businesses.