Key Accounting & Tax Updates for 2026

2026: A New Era of Permanent Tax Rules

For years, small business owners operated under uncertainty about whether key tax provisions would expire. That uncertainty ended in July 2025 when President Trump signed the One Big Beautiful Bill Act (OBBBA), making most Tax Cuts and Jobs Act provisions permanent and introducing several new changes. Here's everything you need to know heading into and through 2026.

1. The One Big Beautiful Bill Act — TCJA Is Now Permanent

The OBBBA permanently extended the individual and small business tax provisions of the TCJA, which had been set to expire at the end of 2025. Key permanencies include:

Section 199A QBI Deduction (20%) — Pass-through business owners (sole proprietors, partnerships, S-Corps, LLCs) can continue deducting up to 20% of qualified business income. This effectively reduces the top rate on pass-through income from 37% to 29.6%.

Tax Rate Structure — The seven-bracket structure (10%, 12%, 22%, 24%, 32%, 35%, 37%) is now permanent. The top rate of 37% applies above $640,600 for single filers and $768,700 for married filing jointly in 2026.

Bonus Depreciation Restored to 100% — After phasing down to 60% in 2024 and 40% in 2025, bonus depreciation is fully restored to 100% for qualifying assets placed in service in 2026.

2. 2026 Standard Deductions

Standard deductions increased with inflation adjustments for 2026:

Married Filing Jointly: $32,200 (up from approximately $30,000 in 2025)

Single / Married Filing Separately: $16,100

Head of Household: $24,150

These increases mean fewer small business owners will benefit from itemizing, making business deductions — which reduce gross income regardless of whether you itemize — even more valuable.

3. New IRS Mileage Rate: 72.5 Cents Per Mile

Effective January 1, 2026, the IRS standard business mileage rate is 72.5 cents per mile, up 2.5 cents from 2025's rate of 70 cents. Medical and military moving purposes: 21 cents/mile. Charitable purposes: 14 cents/mile (set by statute).

At 72.5¢/mile, a business that logs 25,000 annual miles deducts $18,125 — more than most small business owners realize. Use a mileage tracking app to capture every qualifying trip.

4. 1099 Reporting Threshold Raised to $2,000

One of the most impactful changes for small business owners: the OBBBA raised the filing threshold for Form 1099-NEC and Form 1099-MISC from $600 to $2,000, effective for payments made on or after January 1, 2026. The new threshold is indexed for inflation going forward.

What changes: You are no longer required to file a 1099 for contractors or vendors paid less than $2,000 in the calendar year.

What does NOT change: All income remains taxable regardless of whether a 1099 is issued. All payments (even those below $2,000) remain deductible for the paying business. Backup withholding rules align with the new $2,000 threshold.

1099-K: The threshold for third-party payment processors (PayPal, Venmo, Stripe, Square) remains at $20,000 and 200 transactions for 2026.

5. Updated Retirement Contribution Limits

2026 brings meaningful increases across all major retirement plans:

401(k) / 403(b) / 457 / TSP: Employee contribution limit increases to $24,500 (up from $23,500). Catch-up for age 50+: additional $8,000 (total $32,500). Super catch-up for ages 60–63: additional $11,250 (total $35,750).

SEP IRA: Increases to $72,000 or 25% of compensation, whichever is less.

SIMPLE IRA: Employee contribution limit rises to $17,000 ($21,000 for age 50+).

Traditional/Roth IRA: Annual contribution limit increases to $7,500 ($8,600 for age 50+). Roth IRA income phase-out: $153,000–$168,000 single; $242,000–$252,000 married filing jointly.

6. Section 179 Equipment Deduction

The Section 179 first-year expensing limit for 2026 is $2,560,000, with a phase-out beginning at $4,090,000 in total property placed in service. Combined with restored 100% bonus depreciation, small businesses can fully expense virtually any equipment purchase in 2026.

Qualifying property: machinery, computers, software, business vehicles (over 6,000 lbs GVWR for full deduction), office furniture, and qualified improvement property (interior improvements to nonresidential buildings).

7. Enhanced Employer Childcare Tax Credit

The OBBBA significantly expanded the employer-provided childcare credit from $150,000 to $500,000 per year for most employers, and up to $600,000 for eligible small businesses. This applies to employers who fund, subsidize, or provide qualified childcare facilities for employees. If you have a workforce with young families, this credit is worth exploring with your CPA.

8. BOI Reporting Update

The Corporate Transparency Act's Beneficial Ownership Information (BOI) reporting requirement, originally mandated for most LLCs and corporations, has faced significant legal and legislative challenges. Consult your attorney or CPA for the current status of your filing obligation, as enforcement and deadlines have shifted multiple times since the original 2024 deadline.

Next Steps for Small Business Owners

With TCJA now permanent and several new OBBBA provisions in play, 2026 is an excellent year to do a comprehensive tax strategy review. Key priorities: maximize retirement contributions, review entity structure for QBI deduction eligibility, update your mileage tracking system, and verify your 1099 obligations under the new $2,000 threshold.

The team at Accounting BOSS helps Florida small businesses navigate every one of these changes. Schedule your 2026 tax strategy session today.