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2026 Tax Law Changes for Businesses
Here’s a sampling of some significant tax law changes going into effect this year:
- Increase of the Section 179 expensing limit to $2.56 million and the phaseout threshold to $4.09 million (up from $2.5 million and $4 million, respectively, for 2025).
- Expansion of the income ranges over which the Section 199A qualified business income deduction limitations phase in, generally to $201,750 — $276,750 (up from $197,300 — $247,300 for 2025), double those amounts for married couples filing jointly.
- Reduction of the threshold for the excess business loss limitation to $256,000 (down from $313,000 for 2025), double those amounts for joint filers.
- Increase of the limitation on the use of the cash method of accounting to $32 million (up from $31 million for 2025).
- Elimination of certain clean energy incentives, such as the Section 179D deduction for energy-efficient commercial buildings and the alternative fuel vehicle refueling property credit (both after June 30, 2026).
Contact the office to discuss how these or other changes might affect your business.
Which Parent Gets the Tax Breaks After Divorce?
IRS rules determine who can claim many child-related federal income tax breaks after parents divorce or legally separate. Generally, the parent with whom the child spends the most nights gets the benefits. But the rules allow this “custodial” parent to release to the other, “noncustodial,” parent the right to claim the child for certain tax breaks if specific tests are passed.
Even then, some tax benefits, such as head of household filing status and the child and dependent care credit, remain with the custodial parent. Also, the custodial parent may revoke the release of the right to claim the child for the tax breaks. The rules are complex. Contact the office for more information and assistance.
If You’re Closing Your Business, Don’t Forget These Tax Steps
Closing a business can be overwhelming. But it’s important not to let tax duties fall through the cracks. File a federal income tax return for your business’s final year and, if you have employees, make final federal tax deposits and report employment taxes. If you engaged independent contractors and, in your final year, paid anyone $600 or more ($2,000 for 2026, indexed for inflation after that), report the payments.
Also, cancel your employer identification number (EIN) by sending the IRS a letter with the EIN, business name and address, and reason for closing your account. Finally, retain records of your business’s tax returns, employment tax payments and any property it owned. Contact the office for help.
