For Small Businesses: Important 2026 Tax Figures
December 29, 2025
A new year brings many new tax-related figures for businesses. Here’s an overview of key figures for 2026. Be aware that exceptions or additional rules or limits 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)
Planning for 2026
We can help you factor these changes and others into your 2026 tax planning. Contact us to get started.
© 2025
