2026 Business Tax Planning: Key Rules Business Owners Should Revisit

The tax landscape for business owners changed significantly after the major 2025 tax legislation.

Several provisions scheduled to expire were extended or made permanent, while other business tax rules were expanded. For many owners, the result is greater certainty around long-term planning.

Here are several areas worth revisiting in 2026.

The QBI Deduction Is Permanent

The Section 199A Qualified Business Income deduction is now permanent.

Eligible owners of sole proprietorships, partnerships, S corporations, and certain other pass-through businesses may generally deduct up to 20% of qualified business income, subject to income thresholds and other limitations.

For business owners, this makes QBI planning relevant not just at year-end, but in decisions involving compensation, retirement-plan contributions, taxable income, and business structure.

100% Bonus Depreciation Is Back

Permanent 100% bonus depreciation is available for qualifying property acquired after January 19, 2025.

This can allow businesses to deduct the full cost of qualifying equipment, machinery, and other property in the year it is placed in service rather than depreciating the cost over several years.

The largest immediate deduction is not always the best long-term result, so coordinate significant purchases with projected income and future tax years.

Section 179 Limits Increased

Section 179 also became more valuable.

For 2026, businesses may generally expense up to $2.56 million of qualifying property, subject to the investment phaseout and taxable-income limitation.

Section 179 can provide more control than bonus depreciation because businesses can choose how much of an eligible asset to expense.

Business Structure Still Matters

Permanent tax provisions do not eliminate the need to periodically review whether your business structure still makes sense.

For example, an S corporation may reduce self-employment taxes in some situations, but it also introduces payroll, reasonable-compensation, compliance, and administrative requirements.

The right structure depends on profitability, compensation, employee needs, retirement planning, and the owner's broader tax picture.

Planning Beyond One Tax Year

The biggest benefit of the new law may be greater certainty.

Business owners can now evaluate major purchases, retirement-plan contributions, compensation, entity structure, and other decisions without planning around an automatic expiration of several important provisions.

That makes multi-year projections more valuable, especially for businesses with changing income or major investments ahead.

Final Thoughts

Business tax planning is most effective when major decisions are evaluated before they are finalized.

The permanent QBI deduction, 100% bonus depreciation, and higher Section 179 limits create meaningful opportunities, but each strategy should be considered in the context of the business's overall financial goals.

Could Your Business Benefit From a Tax Strategy Review?

If your business income, compensation, or investment plans are changing, proactive tax planning can help determine which strategies fit your circumstances.

Weissgarber CPA works with business owners on proactive tax planning designed around both business and individual tax considerations.

This article is for general informational purposes only and does not constitute tax or legal advice. Tax outcomes depend on individual circumstances and applicable law.