As a business owner, staying ahead of the new tax laws for businesses in 2026 is critical. Recent legislation and regulatory updates are reshaping how companies of all sizes structure themselves, claim deductions, and manage investments. By understanding these changes now, you’ll be better positioned to adapt your entity, optimize your tax strategy, and remain compliant in the upcoming tax year.
In this guide, we share everything you need to know and prepare for!
Entity Structure and Pass-Through vs. C-Corporation Considerations
One of the most significant aspects of the new tax laws for businesses 2026 involves how different business entities are taxed and how owners of pass-through entities should plan.
- The 20% deduction for qualified business income (QBI) for owners of pass-through entities such as S-corporations, partnerships, and LLCs has been made permanent.
- On the C-corporation side, there may be modest declines in the average corporate tax liability due to adjustments in rate calculations and expensing allowances.
- For start-ups and small businesses, changes to the qualified small business stock (QSBS) rules, such as raising the per-issuer dollar cap from $10 million to $15 million and increasing the gross assets ceiling from $50 million to $75 million (indexed), create new planning opportunities.
Because entity type affects tax treatment, investment opportunities, and exit planning, now is the time to revisit your structure with your tax advisor.
Capital Expenditures, Depreciation, & Interest Deduction Rules
Preparation for the new tax laws also means taking a close look at how you invest in your business and how borrowing or fixed assets are treated.
- The new law expands depreciation and expensing options, with increased bonus depreciation available for qualifying property placed in service after January 19, 2025.
- The limitation on interest-expense deductions is adjusted: depreciation, amortization, and depletion are excluded from adjusted taxable income when calculating the deduction limit, potentially benefiting leveraged businesses.
- The timing of equipment purchases or expansion projects could significantly affect your tax liability. Deciding whether to accelerate or delay spending may provide measurable savings.
Employee Benefits, Credits, & Reporting Rules
Under the new tax laws for businesses, employers will need to prepare for new incentives and new reporting thresholds.
- The employer-provided childcare tax credit increases substantially beginning January 1, 2026, offering greater benefits for both large and small businesses.
- Reporting thresholds for certain business-income and payment-processor forms will change, requiring updates to accounting and payroll systems.
- Some deductions for employer-provided meals or on-site cafeterias may be limited starting in 2026, altering how companies structure employee perks.
Employers should review their benefits, credits, and reporting procedures early to stay compliant and capitalize on new opportunities.
Deduction Floor Changes & Charitable Giving
Photo by Anastassia Anufrieva on Unsplash
Another major change for businesses involves how itemized deductions and charitable contributions are handled.
- Starting in 2026, taxpayers in the top bracket will face a 35% limit on total itemized deductions relative to taxable income.
- For corporations, charitable contribution carry-forward and percentage-of-income ceilings may shift, influencing when and how donations should be made.
- Businesses engaged in charitable giving may benefit from timing their contributions strategically—either accelerating into 2025 or deferring until 2026 depending on their forecasted income.
These changes make year-end tax planning even more critical for businesses that support community and nonprofit initiatives.
Strategic Timing and Proactive Planning
To fully respond to the new tax laws, timing is everything. Here are a few planning points:
- Timing of purchases: Review whether it’s better to move large equipment purchases into 2025 or defer until 2026.
- Revenue recognition: Evaluate whether shifting certain income or expenses between fiscal years could improve your position.
- Financing decisions: With the revised interest-expense limitation, businesses may need to adjust debt-to-equity strategies.
- Benefit and credit utilization: Expanded credits for childcare and employee support programs may affect hiring or benefit planning.
- Entity review: Permanent changes to QBI deductions and QSBS limits make 2026 an ideal time to confirm that your entity type still aligns with your growth goals.
Proactive tax planning can help you avoid the rush of last-minute decisions when the new rules take effect.
Partnering with Katherine M. Johnson, CPA
When you want a tax advisor who can translate the new tax laws for businesses into clear, actionable guidance, Katherine M. Johnson, CPA, is here to help.
Her firm works closely with business owners to:
- Review current structures and simulate tax outcomes under the 2026 changes.
- Evaluate depreciation schedules, capital investments, and financing approaches.
- Assess payroll and benefit programs to ensure compliance and identify potential credits.
- Develop a month-by-month plan for 2025 and 2026 to align expenses, revenue, and charitable activities for maximum efficiency.
Beyond standard tax compliance, Katherine’s approach is centered on education and long-term strategy. She believes informed clients make stronger decisions, so each consultation includes clear explanations of how the new provisions apply to your unique business model.
Whether you operate a professional service firm, retail business, or manufacturing company, her goal is to simplify complexity, reduce uncertainty, and uncover savings opportunities that might otherwise be missed. With decades of experience guiding small and mid-sized businesses, she understands that tax planning is not just about forms. In reality, it’s strongly about building a financially resilient enterprise.
Working with a skilled CPA now ensures that your business stays ahead of policy shifts, protects cash flow, and leverages every available advantage.
Be Prepared for New Tax Laws for Businesses in 2026
In summary, the new tax laws for businesses 2026 represent a major turning point in U.S. tax policy. From extended pass-through deductions to enhanced business credits and revised depreciation rules, the coming year will bring both challenges and opportunities. Business owners who prepare early can minimize exposure, time investments strategically, and maximize long-term benefits.
If you’re ready to understand how these changes affect your company, contact Katherine M. Johnson, CPA, to schedule a consultation. With proactive planning and expert insight, you can approach 2026 with confidence and a clear financial strategy.
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