One of the most important changes for eligible pass-through businesses is the continuation of the 20% Qualified Business Income deduction.
The provision under Section 199A has been made permanent, giving eligible business owners greater certainty when planning their federal taxes.
This may be relevant to certain sole proprietors, partnerships, S corporations and other qualifying businesses.
The IRS increased the standard business mileage rate to 72.5 cents per mile for 2026, compared with 70 cents per mile in 2025.
Businesses that use vehicles for qualifying business purposes should maintain accurate mileage records throughout the year.
Keeping a mileage log can make it easier to support deductions during tax preparation.
The 2026 rules continue to provide significant opportunities for businesses purchasing qualifying equipment and other property.
Under the updated rules, certain qualifying business property placed in service after January 19, 2025 may be eligible for 100% first-year depreciation.
This can be particularly useful for businesses investing in equipment, machinery and other qualifying assets.
Businesses with research and experimental expenses should review the updated R&E rules carefully.
The One, Big, Beautiful Bill changed how certain domestic and foreign research expenses are treated. Eligible businesses may also have options involving prior tax years, amended returns or accounting method changes.
Businesses that invest heavily in research should discuss these changes with a qualified tax professional before filing.
The limitation on excess business losses has been permanently extended and the applicable thresholds are indexed for inflation for tax years beginning after 2025.
This can be especially important for business owners who report significant losses from business activities.
For certain reportable payments made after 2025, the information reporting threshold increases to $2,000.
Small businesses should review their vendor payments and reporting procedures to determine which payments may require information returns.
Important changes include the continuation of the 20% QBI deduction, a 72.5-cent business mileage rate, updated R&E expense rules, changes to information reporting and permanent excess business loss limitations.
Yes. The Section 199A qualified business income deduction was made permanent for eligible businesses.
The IRS standard mileage rate for business use is 72.5 cents per mile for 2026.
Certain qualifying business property may qualify for 100% first-year depreciation under the updated rules. Eligibility depends on the property and when it was placed in service.
Yes. The tax treatment of certain research and experimental expenses changed, and eligible businesses may have options for prior tax years.
Maintain accurate bookkeeping, track business expenses, document mileage, review equipment purchases and research expenses, and discuss applicable tax provisions with a qualified tax professional.