McFadden Accounting

Half the year is behind us — and half the year is still up for grabs. The five numbers we ask every business owner to pull and stare at before July 31st.

Mid-Year Financial Checkup - McFadden Accounting

The QBI deduction lets you write off 20% of your qualified business income.

Most sole proprietors have never claimed it.

Here's the plain-English version:

If your business earns $100,000 in profit, the QBI deduction lets you pay taxes on $80,000 instead. You deduct $20,000 before your tax rate ever touches it.

For 2026, the full deduction is available if you earn:
→ Under $191,950 as a single filer
→ Under $383,900 filing jointly

Above those thresholds, it phases out — but doesn't disappear entirely.

The deduction also has a floor: if your QBI is at least $1,000, you're guaranteed a minimum $400 deduction.

Here's what most people miss: if you're approaching those thresholds, there are legal moves — accelerating deductions, adjusting entity structure, timing income — that can keep you inside the full deduction range.

But those moves only work if you're looking at your numbers before year-end, not after.

Save this post. When you're reviewing your Q3 numbers this summer, come back to it and run your projection.

Paying $300/month for bookkeeping and $8,000 in IRS penalties is still math.

Bad math.

We talk to business owners every week who are proud they're keeping costs low on accounting. $150/month. Sometimes less. "I just need the basics."

Here's what the basics miss:

→ Estimated tax payments calculated wrong → underpayment penalties
→ Missed deductions because nothing was properly categorized
→ An IRS notice that costs $2,000–$5,000 to resolve — if you catch it early
→ A bookkeeper who files things but never flags problems

The "cheap accounting" math only works if you never look at the full ledger.

We're not the cheapest option. We never will be.

But we're the option where a $22,000 savings finding in year one makes the investment look like the obvious decision in hindsight.

The question isn't what accounting costs. It's what bad accounting costs.

What's a financial mistake from under-investing in your books cost you? I'll go first in the comments.