3 tax changes that could save you money in 2026
Good news: several major tax changes are now in effect that can save your business real money. Here's what you need to know.
1. Retirement Contribution Limits Increase
The IRS adjusts tax thresholds each year for inflation. Several of these changes matter for small business owners in 2026.
401(k)/403(b) employee limit: $24,500
IRA limit: $7,500
Catch-up contributions (age 50+): $8,000
Higher catch-up for ages 60-63: $11,250
What this means for you: These higher limits let you and your employees defer more income into tax-advantaged retirement accounts. That lowers taxable income now while building long-term savings. Even if you don’t offer a 401(k) there are large opportunities for savings.
2. 1099 Reporting Thresholds Changed
Starting in 2026, you'll need to file fewer 1099 forms — but tracking is still essential.
Here's a change that'll save you paperwork: the reporting threshold for contractor payments went up from $600 to $2,000. If you paid a contractor less than $2,000 for the year, you don't need to send them a 1099. That's a big change.
3. 100% Bonus Depreciation is Back
A federal tax law passed in 2025 made several valuable tax benefits permanent. You can count on these deductions year after year when planning your business finances.
Most capital equipment you buy for your business —things like vehicles, computers, heavy machinery, or furniture — you can once again deduct the full cost in the year you buy it. No more stretching the write-off over five or ten years. Buy it, use it, deduct it.
For bigger purchases, this brings back one of the fastest ways to lower your taxable income.
The Bottom Line
As with all tax items, the devil is in the details, but we are here to help. We actively monitor these changes, along with all others, and can review them with our clients to ensure their tax preparer has everything needed to maximize the new regulations.
