As the calendar turns to 2026, a new set of tax limits, thresholds, and dollar amounts come into play for businesses and their owners. These annual adjustments can affect everything from depreciation strategies and retirement plan contributions to employee benefits and key tax deductions.
The following summary highlights many of the most important business-related tax figures for 2026.
Keep in mind that special rules, phaseouts and exceptions may apply, so these numbers should be considered in the context of your overall tax situation.
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
These figures provide a helpful starting point for understanding the tax landscape in 2026, but applying them effectively requires careful planning. Changes in income, business structure, investments, or employee benefits can all affect how these limits impact your situation. We can help you evaluate these numbers in light of your specific goals and identify planning opportunities for the year ahead. Contact your Rudler, PSC advisor at 859-331-1717 to discuss how to incorporate these and other tax changes into your 2026 tax strategy.
RUDLER, PSC CPAs and Business Advisors
This week's Rudler Review is presented by Josh Myers, Senior Accountant and Becca Thorman, CPA, CVA.
If you would like to discuss your particular situation, contact Josh or Becca at 859-331-1717.
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