If you're self-employed or run a small business, 2026 is the year the rules changed in your favor. A major new tax law — nicknamed the "One Big Beautiful Bill" (OBBBA) — took effect, and several of its changes can put real money back in your pocket this year.
The catch? Most of these changes are brand-new, so a lot of business owners haven't caught up yet. Here are the seven that matter most for you.
1. The 20% QBI deduction is now permanent — and easier to qualify for
The Qualified Business Income (QBI) deduction lets many self-employed people and small-business owners deduct up to 20% of their business income before taxes. It was set to expire — but the new law made it permanent. No more wondering if it'll disappear.
Even better, the income range before the deduction starts getting limited got wider — by $75,000 for single filers and $150,000 for married couples filing jointly. That means more people qualify for the full benefit.
Quick note: You may have seen headlines saying the deduction jumped to 23%. That was only in an early draft of the bill — the final law kept it at 20%. Don't let bad info cost you.
2. There's a new $400 minimum deduction just for being in business
Starting in 2026, if you actively run a business and have at least $1,000 of qualified business income, you're guaranteed a minimum QBI deduction of $400 — even if the normal math would have given you nothing. It's small, but it's free money the old rules didn't offer, and it'll rise with inflation going forward.
3. 100% bonus depreciation is back — and this time it's permanent
If you buy equipment, machinery, tech, or other qualifying business property, you can once again write off 100% of the cost in the year you buy it instead of spreading it out over many years. This had been phasing down — the new law brought it back to a full 100% and made it permanent for assets placed in service after January 19, 2025.
For you, that means a big purchase can become a big deduction this year, not a slow trickle over a decade.
4. You can write off almost any equipment you buy (Section 179)
Section 179 is the other "deduct it now" tool, and its limits jumped. For 2026 you can immediately expense up to about $2.56 million in qualifying purchases, and the cap doesn't even start to shrink until you've spent more than $4.09 million.
Translation for most solo and small operators: there's effectively no ceiling you'll ever hit, so the equipment, vehicles, and tech you buy for your business can be fully deducted the year you put them to work.
5. Research and development costs are fully deductible again
If part of your work involves developing or improving a product, software, process, or formula, here's good news: you can once again deduct your U.S.-based R&D costs immediately instead of stretching them over five years. The new law made this permanent for domestic research.
And if you're a smaller business (average gross receipts under $31 million — that's nearly all of us), you may even be able to go back and claim deductions on R&D from 2022–2024 by amending those returns. That can mean a refund for work you already paid for.
6. The 1099 paperwork threshold just tripled
For years, you had to issue a 1099 to any contractor or vendor you paid $600 or more. Starting with payments made in 2026, that threshold jumped to $2,000 — and it'll rise with inflation after that. Fewer forms to chase, fewer to file.
One related change: if you sell through payment apps or online platforms, the 1099-K reporting threshold is now settled at $20,000 and 200 transactions — not the much lower numbers that had people worried.
7. "No tax on tips" now covers the self-employed too
This one surprises people: the new tip deduction isn't just for W-2 employees. If you're self-employed in a tipped line of work — think rideshare and delivery drivers, salon and beauty pros, personal trainers, and many gig workers — you can deduct up to $25,000 in qualified tips on your Schedule C.
A few guardrails: your deduction can't be more than your net income from that business, it phases out once your income passes $150,000 ($300,000 if married filing jointly), and certain professional fields (like health care and performing arts) are excluded.
Bonus: the mileage rate went up
If you drive for business, the 2026 standard mileage rate rose to 72.5 cents per mile (up from 70 cents). A few thousand business miles can be a four-figure deduction — but only if you keep a log. No record, no deduction.
Don't leave this money on the table
Here's the honest truth: these changes are only worth something if you actually claim them — and most of them are brand-new, so they're easy to miss. One overlooked deduction can cost you far more than a professional would.
At Precision Tax Solutions, we keep up with every one of these changes so you don't have to, and we go line by line to make sure you're keeping every dollar you've legally earned. If you'd rather grow your business than decode the tax code, book a consultation with us and let's put these 2026 changes to work for you.
This article is for general educational purposes and reflects 2026 figures from the IRS and the One Big Beautiful Bill Act. It isn't tax advice for your specific situation. Income limits, phase-outs, and eligibility rules can change — talk with a tax professional before making decisions.
