Week 4: January 26 - February 1, 2026
DON’T MISS
February 2 Deadline is HERE
This is the biggest information return deadline of the year. Because January 31, 2026 falls on a Saturday, the deadline shifts to Monday, February 2, 2026. If you paid contractors, your 1099s must be delivered by this date.
Deadlines hitting this week:
1099-NEC to recipients - Must be in contractors' hands by Feb 2
1099-NEC to IRS - Due Feb 2 whether filing electronically or by paper (no extended deadline for 1099-NEC)
W-2s to employees - Must be delivered by Feb 2
Form 940 - Annual federal unemployment tax return due Feb 2 (or Feb 9 if all FUTA deposits were made on time)
Form 941 - Q4 payroll tax return due Feb 2 (10 extra days allowed if all deposits were timely)
If you missed someone, File the 1099 late rather than not at all. The penalty for late filing is much lower than the penalty for not filing and your contractor needs that form to file their own taxes.
Source: IRS Instructions for Forms 1099-MISC an 1099-NEC; IRS Employme Tax Due Dates
THE SOLOPRENEUR’S BRIEF
Retirement Contribution Deadline Strategy: It's Not Too Late for 2025
Here's something many solopreneurs don't realize: you can still make retirement contributions for 2025. For Traditional and Roth IRAs, the deadline is April 15, 2026 - no extension available. For SEP-IRAs and Solo 401(k) employer contributions, you have until your tax filing deadline including extensions (potentially October 15, 2026).
This is one of the most powerful year-end tax moves available, and some options are still on the table.
What You Can Still Contribute
Traditional or Roth IRA
Deadline: April 15, 2026 (firm - no extension available)
2025 limit: $7,000 ($8,000 if age 50+)
SEP-IRA
Deadline: Tax filing deadline, including extensions
2025 limit: Up to 25% of net self-employment income (max $70,000)
Can be opened AND funded up until you file
Solo 401(k) Employer Contributions
Deadline: Tax filing deadline, including extensions
2025 limit: Up to 25% of compensation
The plan must have been established by December 31, 2025
The Tax Math
Every dollar you contribute to a traditional retirement account reduces your taxable income by one dollar. For a solopreneur in the 24% federal bracket plus 5% state:
$10,000 contribution = $2,900 tax savings
$20,000 contribution = $5,800 tax savings
$50,000 contribution = $14,500 tax savings
You're essentially getting a 29% discount on retirement savings.
In Plain English: Even though 2025 is over, the tax code still gives you time to reduce last year’s tax bill by funding certain retirement accounts. Some options are flexible right up until you file, while others have a hard April 15 cutoff. You're essentially getting a 29% discount on retirement savings.
WHAT TO DO: If you haven't maxed out your 2025 retirement contributions, calculate how much room you have. Make it a priority before April 15.
Source: IRS Publication 560; IRS Notice 2024-80
LESSONS LEARNED
Ghost Preparer Warning Signs: Protect Yourself This Tax Season
A "ghost preparer" is someone who prepares your tax return but refuses to sign it. This is illegal, and it's a major red flag.
Warning signs of a ghost preparer:
They won't sign the return or include their PTIN (Preparer Tax Identification Number)
They want to be paid in cash only
They promise inflated refunds before seeing your documents
They base their fee on a percentage of your refund
They want your refund deposited into their account first
In Plain English: If a paid tax preparer won’t sign your return, that’s a serious red flag. When something goes wrong, the IRS will hold you responsible and not the person who disappeared.
Source: IRS.gov; IRS Circular 230 Guide
BRIEF RECAP
Key takeaway: Missing a tax deadline does not automatically mean you are out of options. Filing late is usually better than not filing at all. Keep in mind, retirement contributions remain one of the few ways to reduce last year’s tax bill even after the year has ended.
In last week’s issue: The mileage deduction is only as strong as the records behind it. Contemporaneous logs, a qualifying home office, and consistent tracking are what protect this write-off if the IRS asks questions later.
Next week: The home office deduction is a legitimate and widely used benefit when the rules are followed correctly. Understanding the exclusive use requirement and comparing both calculation methods helps ensure you claim the deduction that best reflects your actual costs.
Disclaimer: This publication is provided for general informational and educational purposes only and does not constitute personalized tax, legal, or accounting advice. Tax laws are complex and subject to change, and their application depends on individual circumstances. Readers should consult qualified professionals regarding their specific situations.
Circular 230 Disclosure: To ensure compliance with U.S. Treasury Department regulations, we inform you that any U.S. federal tax discussion contained in this publication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or for promoting, marketing, or recommending any transaction or matter addressed herein.