2026 Deductions

New Deductions. New Rules.
Same Deadline.

OBBBA created new deductions and made existing ones permanent. Here's what applies to your business.

The Changes

What Changed for 2026

Permanent

Qualified Business Income (QBI) Deduction

  • 20% deduction on qualified business income. Was expiring end of 2025.
  • Phase-out thresholds expanded: Single $191,950 – $241,950; Married Filing Jointly (MFJ) $383,900 – $483,900.
Source: Warren Averett, IRS.gov
Restored

R&D Expensing

  • Immediate deduction for domestic Research & Development (R&D) (was forced into 5-year amortization since 2022).
  • Retroactive relief for businesses with avg annual gross receipts under $31M.
  • Can amend 2022 – 2024 returns.
Source: Grant Thornton, Schneider Downs
Expanded

Section 179

$2.5M
  • Limit raised to $2.5M (from $1.22M).
  • Immediate deduction for qualifying equipment and property.
Source: IRS.gov
New (Temporary)

Tips & Overtime

  • Tips: up to $25,000 deductible (MFJ).
  • Overtime: up to $25,000 deductible (MFJ) — premium portion only.
  • Phase-out above $150K Modified Adjusted Gross Income (MAGI) ($300K MFJ).
  • Expires 2028.
Source: Uncle Kam
Bonus

Standard Deduction Bonus

  • +$1,000 (single) / +$2,000 (MFJ) for 2026.
  • Senior deduction (65+): up to $6,000 / $12,000.
Your Situation

Which Apply to You?

Pass-through business (LLC, S-Corp, Partnership)?
QBI R&D Sec. 179
C-Corp?
R&D Sec. 179 Corp Provisions
Employ tipped workers?
Tips Deduction
Invest in R&D or product development?
R&D Expensing Retroactive Relief
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Common Questions

Frequently Asked Questions

It depends on your entity type, revenue, and industry. Pass-through businesses (LLCs, S-Corps, partnerships) benefit from permanent QBI, restored R&D expensing, and expanded Section 179. Our free assessment identifies exactly which provisions apply to you.

Yes. OBBBA made the 20% Qualified Business Income deduction permanent. It was set to expire at the end of 2025. The income phase-out thresholds have also been expanded, so more business owners now qualify for the full deduction.

Since 2022, businesses were forced to amortize R&D expenses over 5 years instead of deducting them immediately. OBBBA restores immediate expensing, and businesses with under $31M in average annual gross receipts can amend their 2022 through 2024 returns to recover those deductions.

OBBBA raised the SALT deduction cap from $10,000 to $40,000 for individuals earning under $500,000. This primarily benefits business owners in high-tax states who itemize their deductions.

Most provisions apply to the 2026 tax year, so planning now maximizes your benefit. For retroactive R&D relief, you can amend returns going back to 2022. Our assessment identifies your timeline and action steps.

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This page summarizes provisions of the One Big Beautiful Bill Act (OBBBA) based on publicly available sources as of April 2026. It is not tax advice. Consult a qualified tax professional for guidance specific to your situation. Crane Financial is not affiliated with any cited source.

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