As the 2026 tax and regulatory year begins, U.S. businesses are preparing for a range of significant developments that could affect corporate planning, compliance, and financial reporting. Among the most consequential changes are adjustments to the tax code following the implementation of the One Big Beautiful Bill Act (OBBBA) and updated IRS inflation adjustments. These changes, which impact a wide array of corporate tax strategies, are expected to influence business valuation, investment decisions, and year-end tax planning in the coming year.
One of the major shifts in tax law for the 2026 tax year is the increase in the standard deduction, which will provide immediate benefits to many businesses. The standard deduction adjustment is part of the routine inflation indexing process, designed to reflect the increased cost of living. Additionally, updated Alternative Minimum Tax (AMT) exemption amounts are likely to affect businesses’ overall tax liability calculations. These changes, while in line with general inflation adjustments, also tie into broader tax reforms implemented under the OBBBA. These revisions are expected to play a key role in how businesses approach year-end tax strategies, as they could influence decisions related to corporate valuations, taxable income, and various deductions.
Another key change for businesses in 2026 involves the expansion of the Earned Income Tax Credit (EITC). The eligibility thresholds for the EITC have been broadened, which will allow more businesses to benefit from the credit if they have employees who qualify. The expansion of this credit could have a notable impact on tax planning for businesses with a significant number of employees in lower-income brackets. Many companies are expected to adjust their hiring strategies and employee compensation structures to take full advantage of this tax relief, optimizing both their financial position and the benefits they can offer to their workforce.
In terms of capital investments, a particularly impactful change is the revival of 100% bonus depreciation for qualified property placed in service within certain time windows. This provision, which is now fully in effect, allows businesses to immediately expense capital investments, essentially offering a full deduction for the cost of qualifying property in the year it is put into use. This change could significantly affect capital budgeting decisions, especially for businesses planning large-scale investments in machinery, equipment, or other eligible assets in 2026. The ability to take an immediate deduction could influence how companies approach capital projects, potentially encouraging faster investment and expansion.
Additionally, businesses are closely monitoring adjustments to state and local tax (SALT) deduction rules. These changes could have far-reaching consequences for multinational corporations and companies with cross-border operations. The complexity of navigating the varying tax regimes across different states and jurisdictions could require businesses to re-evaluate their operations, tax positions, and compliance strategies. As more states introduce their own tax reforms, companies will need to stay on top of these developments and ensure they are adjusting their tax planning to minimize liability and ensure full compliance.
Legal and tax advisors are emphasizing the importance of early focus on tax and regulatory planning in 2026. By understanding these changes well ahead of time, businesses can mitigate risks related to non-compliance while optimizing their financial and tax strategies. Integrating these tax law changes into broader corporate governance frameworks early in the year could also provide a competitive advantage, allowing companies to adapt faster to new rules, minimize their tax exposure, and strategically position themselves in an evolving economic landscape.
In conclusion, businesses operating in the U.S. will need to carefully consider the new tax and regulatory adjustments set to take effect in 2026. These changes are poised to impact everything from employee compensation and business valuation to capital expenditures and cross-border operations. Companies that prioritize understanding and adapting to these adjustments will be better positioned to navigate the complex legal landscape and capitalize on new opportunities for growth and compliance in the coming year.
