2026 Tax Law Changes for Businesses

Several important tax law changes are taking effect this year that could significantly impact businesses.

From higher Section 179 expensing limits and expanded qualified business income deduction thresholds to tighter excess business loss limits and the phaseout of certain clean energy incentives, understanding what’s changed is critical for effective tax planning. Learn how these updates may affect your business and what steps you can take now.

Here’s a sampling of some significant tax law changes going into effect this year:

• Increase of the Section 179 expensing limit to $2.56 million and the phaseout threshold to $4.09 million (up from $2.5 million and $4 million, respectively, for 2025).
• Expansion of the income ranges over which the Section 199A qualified business income deduction limitations phase in, generally to $201,750 – $276,750 (up from $197,300 – $247,300 for 2025), double those amounts for married couples filing jointly.
• Reduction of the threshold for the excess business loss limitation to $256,000 (down from $313,000 for 2025), double those amounts for joint filers.
• Increase of the limitation on the use of the cash method of accounting to $32 million (up from $31 million for 2025).
• Elimination of certain clean energy incentives, such as the Section 179D deduction for energy-efficient commercial buildings and the alternative fuel vehicle refueling property credit (both after June 30, 2026).

Understanding how these tax law changes apply to your business is key to effective planning. Contact our office to review your options and develop a strategy moving forward.
Erwin, Fountain & Jackson, P.A. — Jacksonville CPA Firm