🚨 ATTENTION Construction Business Owners: Your Schedule K-1 Just Got an Upgrade
The IRS is watching closer than ever. If you run your construction business as a partnership or LLC, the new 2026 tax season brings changes you need to understand—NOW.
What's Changed?
The IRS has added NEW codes to Box 19 of your Schedule K-1:
- ✅ **Basis shifting tracking** — They're monitoring related-party transactions
- ✅ **Self-employment tax** — For service partners, the IRS wants to know exactly what's being distributed
Translation: The taxman has sharper eyes on how you're structuring distributions.
Why Should Construction Business Owners Care?
If you're a general contractor, subcontractor, or construction LLC owner, you likely operate as a partnership or S-corp for tax purposes. These new K-1 codes mean:
- **More scrutiny on related-party transactions** — If you shift basis between entities, expect questions
- **Higher visibility into distributions** — What you take out vs. what you reinvest is now tracked more closely
- **Potential audit trigger** — Incorrect reporting could flag your return
