There are recent federal tax law changes and updates that can matter to small business owners this filing season and going into 2026.
A lot of these stem from the One Big Beautiful Bill Act, a major tax law passed in 2025 that reshaped business tax rules you’ll use when filing for 2025 (in 2026).
Here are some key points to know:
📍 Qualified Business Income (QBI) Deduction Now Stable
The popular 20% QBI deduction for pass-through business income (like sole proprietorships, LLCs, S-corps, and partnerships) is now made permanent, giving small biz owners predictability for planning.
📍Bonus Depreciation and Asset Write-Offs
Businesses can take 100% bonus depreciation on qualifying assets like equipment and software, meaning you may be able to deduct the full cost in the year you buy them instead of spreading deductions out over time.
📍 Higher Section 179 Expensing Limits
Section 179, which allows you to immediately expense up to a set amount of qualifying property, has been boosted, making it easier to deduct purchases in the current year.
📍 1099 Reporting Threshold Change (Watch This)
For reporting non-employee compensation, the threshold for issuing a 1099-NEC has changed. If you pay a contractor $2,000 or more in the year, the reporting requirement applies, an important compliance detail many small business owners still miss.
📍 Increased SALT Deduction Cap
The cap on state and local tax (SALT) deductions increased, often helpful for business owners in higher-tax states, though limits still apply based on income.
Helpful Reminders:
These changes are part of broader tax law updates that impact both individual and business filings this year. Some provisions are already in effect for tax year 2025 (filed in 2026), and others will continue to shape planning in future years.
Tax laws are complex and individual circumstances vary. We encourage you to speak with your tax professional to understand how these changes could impact you personally.