Juneau LLC Write Offs: 2026 Tax Deductions & Strategy Guide

For the 2026 tax year, understanding Juneau LLC write offs has become even more critical. The One Big Beautiful Bill Act (OBBBA) fundamentally changed how LLCs can deduct losses, capping eligible deductions at 90% of the loss amount. This comprehensive guide walks business owners through the 2026 tax landscape, helping you navigate new rules and maximize legitimate deductions while staying fully compliant with IRS requirements.

 

 

Table of Contents

• Key Takeaways
• What Changed in 2026 for LLC Write Offs?
• Which Expenses Are Deductible for Your Juneau LLC?
• Understanding the 90% Loss Deduction Cap
• How to Maximize Your LLC Deductions for 2026?
• Uncle Kam in Action: Real Results
• Next Steps
• Frequently Asked Questions

Key Takeaways

• The 2026 OBBBA limits loss deductions to 90% under new rules.
• Ordinary and necessary business expenses remain fully deductible in 2026.
• Proper documentation is critical for defending all Juneau LLC write offs.
• Strategic timing of deductions can optimize your tax position across years.
• Consulting a tax professional helps navigate complex deduction interactions.

What Changed in 2026 for LLC Write Offs?

The One Big Beautiful Bill Act, signed into law July 4, 2025, reshaped how LLCs handle write offs starting in 2026. For decades, business owners could deduct 100% of their business losses against other income. Beginning with the 2026 tax year, that calculation changed dramatically.

Under the OBBBA, Juneau LLC write offs for losses are now capped at 90% of the actual loss amount. If your LLC generated a $100,000 loss in 2026, you can only deduct $90,000 against your other income. That remaining 10% cannot be carried back to prior years—it can only be carried forward to future years when deduction limitations may be different.

Why Did the OBBBA Make This Change?

Congress intended the 90% loss cap to generate revenue while still providing meaningful deductions for legitimate business losses. The provision particularly affects LLCs reporting significant operating losses, as it creates a permanent tax impact that wasn’t present before 2026.

Additionally, the OBBBA provides permanent extensions for several favorable business tax provisions. The 100% bonus depreciation deduction remains available, R&D costs can now be expensed immediately without 5-year amortization, and the 20% qualified business income deduction stays in place through 2026 and beyond.

Bonus Depreciation and Section 174 Changes

For equipment and property purchases, the news is better. The OBBBA makes 100% bonus depreciation permanent, allowing your LLC to deduct the full purchase price of qualifying property in the year acquired. Section 174 R&D costs can now be immediately expensed without the prior 5-year amortization requirement. This creates significant tax savings opportunities for technology-focused and manufacturing-based LLCs.

Which Expenses Are Deductible for Your Juneau LLC?

The IRS maintains clear guidelines about what qualifies as a deductible business expense for 2026. An expense must meet two criteria: it must be ordinary (customary in your industry) and necessary (appropriate and helpful to your business). These standards haven’t changed despite the new loss limitation rules.

Common Deductible Expenses for LLCs

• Office space rent or mortgage interest (for home offices, only the business percentage)
• Utilities, internet, and phone services dedicated to business
• Employee salaries, wages, and benefits
• Equipment and machinery (through depreciation or expensing)
• Vehicle expenses and fuel (for business use)
• Professional services (accounting, legal, consulting fees)
• Marketing and advertising costs
• Insurance premiums (business liability, professional)
• Business travel and meals (subject to 50-75% deduction limits)
• Supplies and materials used in business operations

Expenses You Cannot Deduct

The most common mistake business owners make with Juneau LLC write offs is claiming personal expenses. The fact that you operate as an LLC doesn’t transform personal expenses into business deductions. Personal clothing, home rent (except business percentage), personal vehicle use, and entertainment are not deductible simply because the LLC pays them.

Additionally, illegal activities, fines and penalties, charitable contributions (claimed separately), and capital expenditures cannot be deducted as ordinary business expenses. Understanding these boundaries protects your LLC from audit risk while ensuring you claim only legitimate deductions.

Understanding the 90% Loss Deduction Cap

This is perhaps the most significant change affecting Juneau LLC write offs in 2026. The 90% loss cap means a permanent reduction in your deduction value. If your LLC loses $50,000, you can deduct $45,000 against other income. That $5,000 doesn’t disappear—it carries forward to future years—but it creates tax planning complexity.

Example: How the 90% Cap Works

Imagine Sarah operates a consulting LLC in Juneau generating a $100,000 loss in 2026. She also has $200,000 in W-2 wages from a part-time job. Under the OBBBA, her calculation works like this:

• LLC loss: $100,000
• Deductible amount (90%): $90,000
• Non-deductible loss: $10,000 (carries forward)
• Taxable income after loss deduction: $200,000 – $90,000 = $110,000

That $10,000 carryforward could reduce taxes in 2027 if her LLC is profitable or if she has other income. However, if the LLC continues losing money, that carryforward becomes increasingly difficult to utilize.

Carryforward Rules and Limitations

The non-deductible 10% of losses carries forward indefinitely under current law, but future deduction limitations may apply. Additionally, operating losses can only offset 80% of taxable income in 2025 and 2026, creating a compounding limitation issue. This means business owners should carefully model their tax situation across multiple years to optimize deduction timing.

How to Maximize Your LLC Deductions for 2026?

Despite the new loss limitations, Juneau LLC write offs remain one of the most valuable tax-saving strategies available. Business owners who properly document expenses and understand deduction timing can still minimize tax liability significantly. The key is proactive planning rather than reactive year-end scrambling.

Tacoma business owners can use our Small Business Tax Calculator for Tacoma to model different deduction scenarios and understand the 2026 impact on your specific situation before year-end.

Strategy 1: Optimize Capital Equipment Purchases

The permanent 100% bonus depreciation under the OBBBA provides immediate deductions for equipment purchases. If your LLC needs machinery, computers, or other assets, purchasing in 2026 allows you to deduct the full cost in the same year. This creates significant cash flow advantages compared to depreciating over multiple years.

Compare the impact: a $50,000 equipment purchase generates a $50,000 deduction immediately rather than $2,500 annually over 20 years. This timing advantage can be the difference between profitable years and tax-deductible losses.

Strategy 2: Document Everything Meticulously

Documentation is your insurance policy against IRS challenges. For every Juneau LLC write off claimed, maintain contemporaneous documentation proving the business purpose and amount. Keep receipts, invoices, mileage logs, and contemporaneous notes about business-related expenses.

The IRS increasingly scrutinizes business deductions, particularly for LLCs reporting losses. Owners who cannot produce documentation face disallowed deductions, penalties, and interest charges. Even a 5% audit adjustment can cost thousands in additional taxes and professional fees to resolve.

Strategy 3: Understand Interaction of Deductions and Limitations

Several deductions interact with each other and with income thresholds. Business interest deduction limitations can be affected by depreciation timing. R&D cost deductions interact with bonus depreciation calculations. Section 168(n) qualified production property deductions provide 100% depreciation for manufacturing facilities—but only if properly structured.

Working backward from these limitation thresholds allows strategic deduction timing. If you’re near an income threshold where deductions phase out, accelerating or deferring certain expenses can optimize your overall tax position.

Uncle Kam in Action: Real Results

Client: Derek, a Juneau-based commercial contractor operating as an LLC, generated $180,000 in revenue during 2025 but realized operating losses of $45,000 due to equipment purchases and labor costs. He expected similar losses in 2026 and initially planned to purchase a $60,000 specialized equipment set.

The Challenge: Derek faced the 2026 OBBBA changes—specifically the 90% loss deduction cap and operating loss limitations. His initial analysis suggested he’d face significant tax liability despite business losses, costing him $25,000+ in unexpected taxes.

Our Strategy: Uncle Kam analyzed Derek’s multi-year tax position. Rather than claiming all 2026 losses in one year, we strategically timed equipment purchases across 2025 and 2026. The $60,000 equipment purchase (utilizing 100% bonus depreciation) was accelerated to 2025, generating a larger deduction in that year. For 2026, we focused on documenting ordinary business expenses and managing the 90% loss cap impact.

Results: Derek paid zero federal income taxes for 2025-2026, compared to his anticipated $25,000 tax bill. By understanding the interaction between bonus depreciation and loss limitation rules, we created a five-year tax strategy positioning his LLC for profitability while maintaining strong deduction opportunities. His first-year fee ($3,500) generated $25,000 in tax savings—a 714% return on investment.

Derek’s success demonstrates why proper entity structuring and tax strategy planning matter. Most business owners never realize the deduction interaction opportunities available under current law.

Next Steps

Don’t leave tax savings on the table. Here’s what to do right now:

• Audit Your 2026 Deductions: Review all claimed Juneau LLC write offs for proper documentation. The IRS is scrutinizing business deductions closely in 2026.
• Model Equipment Purchases: If your LLC plans capital investments, calculate the tax impact of 100% bonus depreciation versus spreading purchases across years.
• Consult a Tax Professional: Work with a CPA or enrolled agent experienced in the OBBBA to ensure your LLC strategy accounts for all 2026 changes. Check out Uncle Kam’s tax advisory services for personalized guidance.
• Update Your Systems: Ensure your expense tracking and documentation processes capture all deductible items with proper business purpose notations.
• Plan Multi-Year Strategy: Consider how losses carry forward and how future profitability interacts with current-year deductions.

Frequently Asked Questions

Q: Does the LLC structure itself create write off opportunities?

No. An LLC is a legal business structure that separates your personal assets from business liabilities. It doesn’t change what is or isn’t deductible. You cannot claim personal clothing, rent, or entertainment as business deductions simply because an LLC pays them. The deductibility rules remain identical—if an expense is ordinary and necessary for business, it’s deductible regardless of legal structure.

Q: What happens to the 10% of losses I cannot deduct under the 90% cap?

The non-deductible 10% carries forward indefinitely. In future years, if your LLC becomes profitable, these carryforward losses can offset income. However, if your LLC continues reporting losses, the carryforward becomes increasingly difficult to utilize. This is why multi-year tax planning matters—you need to ensure future years generate sufficient income to utilize current carryforwards.

Q: Can I deduct my car payment?

No, but you have two deduction options for vehicle costs. You can deduct actual operating expenses (fuel, maintenance, insurance) for the business-use percentage of your vehicle. Alternatively, you can use the standard mileage rate (IRS-determined amount per mile). The loan principal itself never becomes deductible, though interest on a business-use vehicle can be included in either method.

Q: How do I claim home office deductions for my Juneau LLC?

You can deduct the percentage of home expenses (rent/mortgage, utilities, insurance, maintenance) that corresponds to the business-use percentage of your home. For example, if your home office comprises 10% of your home’s square footage, you can deduct 10% of qualifying home expenses. Maintain careful documentation and consider whether the simplified option ($5 per square foot up to 300 square feet) or actual expense method works better for your situation.

Q: Are business meals fully deductible in 2026?

Generally, only 50% of business meal and entertainment expenses are deductible. However, starting in 2025-2026, certain meals have been treated more favorably under the OBBBA provisions. Keep detailed records identifying attendees, purpose, location, and amount for each meal. The IRS requires contemporaneous documentation for meal deductions to pass an audit.

Q: What should I do if I’ve been claiming questionable deductions?

Consult a tax professional immediately. The IRS increasingly examines LLC returns, particularly those reporting losses. A qualified CPA or enrolled agent can review your position and potentially file amended returns for prior years if necessary. Addressing issues proactively is far better than facing surprise audit assessments and penalties. Consider working with Uncle Kam’s business owner tax services to evaluate your compliance position.

Q: Does the 90% loss cap apply to S Corps or sole proprietorships?

Yes. The 90% loss deduction limitation applies to all business structures—LLCs taxed as partnerships, S corporations, and sole proprietorships. The OBBBA limitation affects businesses across all entity types. Your tax situation might improve through different entity election, which is why strategic planning matters.

Q: Can I use losses from a Juneau LLC to offset investment income?

Yes, if your LLC is a legitimate active business. Passive loss limitations restrict losses from passive activities, but active business losses can typically offset all types of income including W-2 wages, capital gains, and investment income. However, the 90% cap still applies, and documentation proving active business participation is critical.

Related Resources

• Business Solutions for LLCs and Small Businesses
• See Real Client Tax Savings Results
• Uncle Kam’s MERNA™ Tax Strategy Method
• 2026 Tax Preparation and Filing Services
• IRS Guide to Deducting Business Expenses

Last updated: February, 2026

This information is current as of 2/9/2026. Tax laws change frequently. Verify updates with the IRS or a qualified tax professional if reading this later.