Key Business Tax Figures for 2026: What You Need to Know
- Steve Julal
- Jan 26
- 2 min read
A new year means new numbers from the IRS, and staying on top of these changes can really pay off for your business. Here’s a quick rundown of the most important federal tax limits and thresholds for 2026 that business owners and employers should have on their radar. Be mindful, some special rules, exceptions, or phaseouts might apply to your situation.
Depreciation Tax Breaks
Good news continues for depreciation in 2026:
Bonus depreciation is still 100%.
Section 179 expensing limit: $2.56 million
Section 179 phaseout starts at: $4.09 million
Retirement Plan Contribution Limits
Want to save more for retirement? The IRS has raised the annual limits for employer-sponsored retirement plans:
401(k), 403(b), and 457 elective deferrals: $24,500
Catch-up (age 50+): $8,000
Additional catch-up (ages 60–63): $3,250
SIMPLE plan deferrals: $17,000
SIMPLE catch-up (age 50+): $4,000
SIMPLE extra catch-up (ages 60–63): $1,250
Defined contribution plan max: $72,000
Defined benefit plan annual max: $290,000
A few more numbers to keep in mind:
Highly compensated employee threshold: $160,000
Key employee (officer) for top-heavy plans: $235,000
SEP contribution compensation threshold: $800
Other Employee Benefit Limits
Several employee benefit limits are going up this year.
Health Savings Account (HSA) contributions: $4,400 (individual), $8,750 (family)
Health FSA contributions: $3,400
Health FSA rollover: $680
Child and dependent care FSA: $7,500
Employer contributions to Trump accounts: $2,500
Transportation Benefits
Monthly commuter/transit pass: $340
Monthly qualified parking: $340
Other Business Tax Limits
Section 199A QBI deduction phase-in range: $201,750–$276,750 (double for joint filers)
Excess business loss limit: $256,000 (double for joint filers; down from 2025)
Cash method of accounting threshold: $32 million average annual gross receipts (also impacts other rules, like interest expense deduction limits)
Planning Ahead for 2026
Knowing these updated figures can help you spot tax planning opportunities and avoid last-minute surprises. We’re here to help you make sense of these changes and work them into a smart strategy for 2026. Have questions or want to get started? Get in touch with us today!
