February 2026

VOL. 5, ISSUE 2

Are you maximizing the full tax potential of your home and vehicles? While many business owners still struggle with manual mileage logs and measuring tapes, Pratt & LeFevre Strategy eliminates the guesswork. We automate the depreciation process, replacing tedious manual tracking with a streamlined, strategic approach that puts time—and money—back in your pocket.

Reach out to one of our many qualified CFO’s.

Luck of the Irish Business Seminar:  March 4th

• Personal Coaching with Curtis Swenson
• Increasing Sales with Clay L. Neves
• P&L Strategy with Ron Haycock

Click here to register

If you are operating as a Multi-Member LLC or a Partnership, your tax “New Year” starts early. While personal returns aren’t due until April 15, your Form 1065 (Partnership Return) must be filed or extended by March 16, 2026 (since the 15th falls on a Sunday). Failing to hit this date can lead to steep per-partner monthly penalties.

• Pro Tip: This is also the ideal window to review your compensation strategy. Are you taking enough (or too much) in guaranteed payments? Now is the time to adjust before the Q1 books close.

Join the P&L Posse: Earn Bounties for Your Referrals!

Help us grow the Pratt & LeFevre family and “cash in” on your network. We offer three ways to earn based on how much you want to involve yourself:

1. Informant Referral Partner ($150 Bounty)

The Effort: Simply email us the name and contact info of a small business owner or investor. Tell us how you know them and why they need us. We handle the rest. The Pay: $150 for every referral that results in a paid enrollment.

2. Deputy Account Executive (Half Commission)

The Effort: Schedule the appointment on our calendar, attend the meeting, and provide a warm introduction to build trust between your contact and our AE. The Pay: $600 – $1,000 per paid enrollment.

3. Fully Sworn-In Marshall (25% Commission)

The Effort: Take full ownership. Contact, present, and close the deal. We will even join you on your first two presentations to ensure you’re successful. The Pay: $1,200 – $1,500+ per paid enrollment.

Think Big, Start Easy. The more you help on the front end, the more work you can get paid for on the back end! Who do you know that is paying too much in taxes or needs asset protection?

Ready to get your Bounty Badge? Schedule a call with me today to choose your level, get trained, and start banking your bounties: Schedule Your Training Here

The 2026 tax season brings one of the most talked-about changes in recent history: the federal “No Tax on Tips” deduction. Aimed at providing relief to service industry workers, this new rule (part of the One Big Beautiful Bill Act) allows many to keep more of their hard-earned gratuities. However, the IRS has strict definitions on what counts as a “qualified tip.”

What is the “No Tax on Tips” Deduction?

For the tax years 2025 through 2028, eligible taxpayers can take an above-the-line deduction for “qualified tips” received in the course of their work.

• The Limit: You can deduct up to $25,000 per year.
• Phase-outs: The deduction begins to phase out for individuals earning over $150,000 (or $300,000 for married couples filing jointly).

Who Qualifies?

Not everyone who receives a tip is eligible. The IRS has released a specific list of 68 occupations that customarily received tips prior to 2025.

This includes:

• Waitstaff and Bartenders
• Barbers and Hair Stylists
• Bussers and Delivery Drivers

The “Voluntary” Requirement

The biggest hurdle for many is the definition of a “qualified tip.” To be deductible, the tip must be:

1. Voluntary: The customer must be free to determine the amount.
2. Not Negotiated: It cannot be part of a pre-set contract.
3. Unrestricted: Mandatory service charges (e.g., “18% Gratuity added for parties of 6 or more”) generally do not qualify for the deduction unless the customer has the explicit option to modify or remove it.

How to Report in 2026

Starting this year, the IRS is updating Form W-2 and Form 1099. Employers must now separately report “Qualified Tips” and include an “Occupation Code” to verify eligibility. If you are self-employed, you will need to track your tip income separately from your gross receipts on your P&L to claim the deduction on your Schedule C.

Conclusion

While “No Tax on Tips” is a win for the service industry, it requires better record-keeping than ever before. Whether you are a business owner adjusting your POS system or a worker tracking your nightly earnings, staying compliant is the only way to ensure you keep that $25,000 in your pocket.