2026 Tax Changes Every Business Should Be Planning For Now

Oct 16

Every new tax cycle brings tweaks. But 2026? It’s a reset year.

The IRS just dropped the official 2026 inflation adjustments, and thanks to the One Big Beautiful Bill Act (OBBBA), we’re looking at one of the biggest rewrites of the last decade. Higher standard deductions. Expanded credits. Bigger estate exclusions. And for the first time, a major boost to employer childcare benefits.

If you’re a founder, CFO, or operator, this isn’t background noise — it’s a planning checklist. The 2026 tax year affects your cash flow, tax accounting, compensation design, R&D credit strategy, and long-term valuation.

Let’s break it down in plain English: what changed, why it matters, and what your team should be doing right now.

What’s New for 2026 — Key Adjustments You Can’t Ignore

The IRS adjustments in Rev. Proc. 2025-32 apply to more than 60 tax provisions. Many are technical, but a few are big levers for business owners.

1. Standard Deduction Ramped Up

Single / Married filing separately: $16,100
Married filing jointly: $32,200
Head of household: $24,150

Because OBBBA embedded these changes, they are permanent (unless Congress overturns).

2. Marginal Tax Brackets & Rates

The familiar 7-bracket structure stays, but thresholds shift upward slightly: the top 37% rate now kicks in at $640,600(single) / $768,700 (married filing jointly)
Other brackets (35%, 32%, 24%, etc.) are also adjusted with inflation.

3. AMT Exemption, Estate Exclusion & Credits

AMT exemption for unmarried: ~$90,100, phased out starting at $500,000
Estate tax basic exclusion jumps to $15,000,000
Employer-provided childcare tax credit is significantly expanded (from $150,000 to $500,000 for many small businesses)

4. Credits, Benefits & Limits

EITC (Earned Income Tax Credit) rising (for filers with children)
Fringe benefits: new limits for parking, transit benefits rising to $340/month
MSA (Medical Savings Account) and Health FSA limits increase modestly

For most businesses, that translates to one thing: new tax math.

Even small changes to deduction ceilings and bracket thresholds can ripple through your effective tax rate, cashflow timing, and payroll structure.

What This Means for Your Business

The surface takeaway? More room at the top, but more complexity in the middle.

The 2026 structure rewards lean, compliant financial management, not creative accounting.
For growing companies, these changes affect:

For growing companies, these changes touch every core function:

Tax cashflow timing: higher deductions may reduce liability, but affect deferred tax positions.
Payroll structure: updates to withholding and benefits thresholds.
Corporate budgeting: indirect effects on expense allocations, cash reserves, and forecasting accuracy.
Credit strategy: new room for R&D tax credits, childcare credits, and energy incentives.

Translation: if you’re not updating your models now, you’ll be guessing come Q1 2026.

2026 Tax Readiness Checklist for CFOs and Founders

Here’s what your finance and tax teams should be doing right now to make 2026 a smooth ride instead of a scramble.

1. Update Forecasting and Cash Flow Models

Rebuild 2026 tax expense forecasts using updated brackets and deductions.
Recalculate effective tax rate; even a 0.5% shift can change EBITDA optics.
Run multiple scenarios for inflation, revenue slowdowns, and compensation changes.

2. Revisit Entity and Ownership Structure

Check whether your LLC, S-Corp, or C-Corp status is still optimal under new brackets.
Review PTET (Pass-Through Entity Tax) elections — still a useful workaround for SALT caps.
Ensure shareholder agreements and partner distributions reflect new tax realities.

3. Reassess Credits, Deductions, and Elections

Prioritize R&D tax credit documentation — the IRS is tightening audit scrutiny here.
Review startup tax credits for innovation, hiring, and energy investments.
Factor in childcare and adoption credits if you offer employee benefits.
Revisit depreciation schedules to leverage bonus depreciation before it phases down further.

4. Strengthen SOX Compliance and Tax Accounting Controls

If you’re pre-IPO or raising institutional money, make sure your tax provision process meets SOX standards.
Audit deferred tax calculations and tie-outs between book and tax.
Update ERP and accounting software with new tax rate tables and deduction caps.

5. Refresh Compensation and Benefits

Adjust payroll and withholdings for new brackets and FSA/health plan limits.
Reevaluate total rewards strategy — the enhanced childcare credit can shift total comp costs.
Update executive comp and bonus structures to align with new thresholds.

6. Model Long-Term Valuation and Capital Impacts

Reforecast post-tax cashflows for investors and lenders.
Update discounted cash flow (DCF) and EBITDA multiples based on after-tax margins.
Use the new $15 million estate exclusion to model tax-efficient exits or succession plans.

7. Bring in Outside Expertise

Engage a startup tax accountant or fractional CFO who understands 2026’s new playbook.
Align your tax accounting and financial management early, not after filings are due.
Build your quarterly tax calendar now to avoid late or estimated payment penalties.

Bottom Line

The 2026 tax code isn’t a crisis. It’s a clarity test.

Companies that treat taxes as a once-a-year filing event are always playing defense.
Companies that integrate tax strategy into financial management will lead with confidence.

Between higher deduction ceilings, expanded credits, and stricter compliance expectations, 2026 is the year to tighten your tax playbook. Build better forecasts, align your entity structure, and get serious about documentation.

Because the IRS isn’t waiting — and neither should you.

Ready to Get Ahead of 2026? Book a strategy call with Ursa.
We’ll help you model your 2026 tax exposure, identify credits worth claiming, tighten your SOX compliance, and make sure your tax accounting supports your growth — not slows it down.

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