Planning for 2026 Tax Changes: What Small Business Owners Should Do Now

Tax season might feel far away, but 2026 will be here before we know it—and it’s bringing a few recently announced changes that small business owners should know about. A little planning now can make a big difference when those new rules take effect.

I am Craig Auer, owner of Auer CPA, a Northern Colorado CPA firm. Let’s break down what’s changing, what it means for your business, and what you can do to stay ahead.

What’s Changing in 2026

1. Tax Brackets Are Adjusting

The government updates tax brackets each year for inflation, and 2026 will be no different. That means your income might fall into a slightly different tax range—even if your business doesn’t grow much. Think of it like moving up a step on a ladder: your income might not have changed much, but the numbers underneath did.

What you can do: Now’s a good time to take a quick look at where your income and expenses stand. If your business has been growing, a little planning can help you avoid an unexpected tax bill next year. Working with someone who offers business tax planning services can make it easier to see what’s coming and prepare with confidence.

2. Standard Deductions Are Going Up

The standard deduction—the amount you can automatically deduct without itemizing—is increasing again in 2026. That’s good news for many small business owners, especially those who don’t have a lot of itemized expenses.

Example: If you usually take the standard deduction instead of tracking every expense, you might see a small boost in how much income isn’t taxed.

3. A Few Business Rules Are Shifting

A few other updates are coming that affect small business owners directly:

• 1099 forms: You’ll only need to file a 1099-NEC or 1099-MISC for payments over $2,000 (instead of $600).
• Childcare credits: If you help cover childcare for employees, you may qualify for a larger tax credit.
• Equipment and tools: 100% deductions for qualifying business equipment are sticking around, so big purchases may still offer full write-offs.
• SALT deduction cap: The limit for deducting state and local taxes will temporarily rise to $40,000, which could help those in higher-tax states.

Why This Matters

Even if you don’t love tax talk, it’s worth knowing how these changes can affect your cash flow. For many business owners, taxes aren’t just about numbers—they’re about timing.

If you can predict how these shifts will play out, you can make smarter choices, like:

• Buying new equipment this year instead of next.
• Adjusting how much you pay yourself.
• Setting aside extra funds if your tax bill might be higher.

What You Can Do Now

Here are a few easy steps to get ready:

1. Run a quick projection. Look at your 2025 numbers and estimate what your 2026 income might be.
2. Review your business setup. Ask yourself if your current structure (LLC, S corp, etc.) still makes sense under the new brackets.
3. Plan your spending. If you know you’ll need equipment or software upgrades, decide whether it makes sense to buy before or after the year changes.
4. Schedule a check-in. Don’t wait until tax season—touch base with your CPA midyear to see if anything needs adjusting.

A Quick Example

Let’s say your business brings in around $200,000 a year. Because the tax brackets are shifting, that same income could land in a slightly higher range in 2026, changing what you owe. But if you plan early—by adjusting income timing or taking advantage of deductions—you can soften that impact.

The Bottom Line

Tax changes don’t have to be stressful. When you understand what’s coming, you can plan with confidence and avoid surprises later.

At Auer CPA, we love helping Northern Colorado business owners feel more in control of their finances. If you’d like to see how the 2026 changes might affect you, reach out today. We’ll walk through your numbers and make a plan that fits your goals—so you can focus on running your business, not just running the numbers.

Let’s start planning for 2026 together.