Business Owners: New 2026 Tax Figures To Note

29 December 2025
Articles, Tax

Business Owners: New 2026 Tax Figures To Note

Ringing in the new year also means ringing in new 2026 tax figures for businesses. Review and take note of these changes for 2026 and be aware of exceptions or additional rules and limits that may apply.

Depreciation-Related Tax Breaks

Bonus depreciation: 100%
Section 179 expensing limit: $2.56 million
Section 179 phaseout threshold: $4.09 million

Qualified Retirement Plan Limits

401(k), 403(b), and 457 plan deferrals: $24,500
401(k), 403(b), and 457 plan catch-up contributions for those age 50 or older: $8,000
401(k), 403(b), and 457 plan additional catch-up contributions for those age 60, 61, 62, or 63: $3,250
SIMPLE deferrals: $17,000
SIMPLE catch-up contributions for those age 50 or older: $4,000
SIMPLE additional catch-up contributions for those age 60, 61, 62, or 63: $1,250
Contributions to defined contribution plans: $72,000
Annual benefit limit for defined benefit plans: $290,000
Compensation defining highly compensated employee: $160,000
Compensation defining key employee (officer) in a top-heavy plan: $235,000
Compensation triggering Simplified Employee Pension contribution requirement: $800

Other Benefits Limits

Health Savings Account (HSA) contributions: $4,400 for individuals, $8,750 for family coverage
Health Flexible Spending Account (FSA) contributions: $3,400
Health FSA rollover: $680
Child and dependent care FSA contributions: $7,500
Employer contributions to Trump account: $2,500
Monthly commuter highway vehicle and transit pass: $340
Monthly qualified parking: $340

Miscellaneous Business-Related Limits

Income range over which the Section 199A qualified business income deduction limitations phase in: $201,750 – $276,750 (double those amounts for married couples filing jointly)
Threshold for the excess business loss limitation: $256,000 (double that amount for joint filers) — note that this is a reduction from 2025
Limitation on the use of the cash method of accounting: $32 million (also affects other tax items, such as the exemption from the 30% interest expense deduction limit)