If you run a business, you already know that the tax code never sits still. But 2026 is shaping up to be an especially active year. The One Big Beautiful Bill Act, signed into law as the 2025 Budget Reconciliation Act, has overhauled several major tax provisions that directly affect how businesses report income, make charitable donations, claim deductions, and plan for the future.
Some of these changes are good news. Others add complexity. And a few could trip you up badly if you are not paying attention.
This is not the year to wing it. If you have been managing your own taxes or relying on a basic filing service, now is the time to bring in a qualified bookkeeper and tax strategist who can help you understand what is changing and how to take full advantage of it.
Here is a look at the most significant tax changes headed your way — and what they mean for your bottom line.
100 Percent Bonus Depreciation Is Back and Permanent
This might be the single most impactful change for small and mid-sized businesses in 2026. Under the original Tax Cuts and Jobs Act, businesses could deduct the full cost of qualifying property in the year it was placed into service. But that benefit had been phasing down — it dropped to 80 percent in 2023, 60 percent in 2024, and was on track to disappear entirely.
The new law reverses that decline. Starting with property acquired and placed in service after January 19, 2025, businesses can once again deduct 100 percent of the cost of qualifying assets in year one. And this time, the provision is permanent.
That means if you buy equipment, vehicles, furniture, or make certain building improvements, you may be able to write off the full purchase price immediately instead of spreading it out over several years.
This is a big deal — but only if you know how to use it properly. A bookkeeper who tracks your asset purchases and a tax strategist who understands depreciation rules can help you time your capital investments to maximize your deductions. Without that guidance, you might leave thousands of dollars on the table.
The Qualified Business Income Deduction Gets a Makeover
The Section 199A deduction, which allows eligible pass-through businesses to deduct up to 20 percent of their qualified business income, was set to expire at the end of 2025. The new law makes it permanent — which is a relief for the millions of sole proprietors, partnerships, and S corporations that rely on it.
But there is a twist. Starting in 2026, the deduction begins to phase out for higher earners. If you are single or filing as head of household, the phase-out kicks in around $278,000 in income. For married couples filing jointly, it starts around $556,000.
On the other end of the spectrum, there is also a new minimum deduction. Anyone with at least $1,000 in qualified business income will receive a minimum deduction of $400, even if the normal calculation would zero them out.
These thresholds and phase-outs are exactly the kind of thing that trips up business owners who handle their own returns. A good tax strategist can help you structure your income and deductions in a way that keeps you on the right side of these limits.
Business Interest Expense Deductions Are Loosening Up
One change that flew under the radar for many business owners involves how the IRS calculates the limit on deductible business interest. Previously, the cap was based on EBIT — earnings before interest and taxes. Starting in 2026, businesses can add back depreciation and amortization when calculating their adjusted taxable income, returning to the more generous EBITDA-based formula.
In plain English, that means the ceiling on how much interest you can deduct just got higher. For businesses carrying significant debt, this could translate into meaningful tax savings.
But again, you need someone who understands the numbers. Your bookkeeper should be tracking interest expenses accurately throughout the year, and your tax advisor should be running the calculations to ensure you are claiming every dollar you are entitled to.
Higher 1099 Reporting Threshold
If your business works with independent contractors, here is a change worth noting. The reporting threshold for issuing 1099 forms is increasing significantly in 2026. Under the previous rules, you were required to issue a 1099 for any contractor you paid $600 or more in a year. That threshold is jumping to $2,000.
This simplifies things for businesses that work with a lot of freelancers or subcontractors. But it does not mean you can stop tracking those payments. The IRS still expects you to report income accurately, and contractors are still responsible for reporting their earnings. What this change really does is reduce paperwork for smaller engagements.
That said, your bookkeeper should still be coding and tracking every contractor payment. Accurate records protect you in the event of an audit, regardless of whether a 1099 is required.
Expanded Employer Childcare Tax Credit
This one could be a game-changer for businesses that want to attract and retain talent. The employer-provided childcare tax credit has been significantly expanded under the new law. The credit rate jumps to 40 percent — or 50 percent for eligible small businesses — and the cap increases to $500,000, or $600,000 for qualifying small businesses. Compare that to the old cap of $150,000, and the opportunity here becomes pretty clear.
If you are already providing childcare benefits or considering it, this credit could offset a substantial portion of the cost. A tax strategist can help you understand how to structure these benefits and ensure you qualify for the maximum credit.
State-Level Changes Add Another Layer
Federal tax changes tend to get the most attention, but do not overlook what is happening at the state level. Several states implemented corporate income tax reductions effective January 1, 2026, including Nebraska, North Carolina, and Pennsylvania. Others are adjusting sales tax rules, phasing out franchise taxes, or expanding net operating loss deduction caps.
If your business operates in more than one state — or if you sell to customers across state lines — the compliance picture just got more complicated. This is another reason to work with a bookkeeper and tax professional who understands multi-state obligations.
Why This All Points Back to Professional Help
Look, none of these changes exist in a vacuum. They interact with each other, and they interact with your specific business situation. The right combination of deductions, credits, and income structuring can save you tens of thousands of dollars. The wrong combination — or worse, no strategy at all — can cost you just as much.
A qualified bookkeeper keeps your financial data clean, organized, and ready for tax planning throughout the year. A tax strategist takes that data and turns it into a plan that minimizes what you owe and maximizes what you keep.
Trying to navigate 2026 tax law on your own is like trying to build a house without blueprints. You might get something standing, but it probably will not be what it could have been.
The tax code just changed in a big way. Make sure you have the right people helping you respond to it.
