How the One Big Beautiful Bill Act Changes Small Business Taxes in 2026
The One Big Beautiful Bill Act (OBBBA) reshapes small business taxes in 2026 by locking in key breaks and tweaking how deductions, expensing, and credits work for owners. If you run a sole proprietorship, LLC, S‑corp, or partnership, it changes how much of your income is taxed, when you can write off major purchases, and which tax credits are worth planning around.
This guide breaks down the biggest OBBBA changes for 2026—tax brackets and the standard deduction, the QBI deduction, bonus depreciation and expensing, and key deductions and credits—so you can adjust your strategy before year‑end instead of reacting at filing time.
1. Tax brackets and standard deduction in 2026
OBBBA keeps the seven‑bracket individual structure (10% through 37%) but updates the thresholds and increases the standard deduction starting in 2026. That matters because most small business owners ultimately pay tax on business profit through their personal returns.
For 2026, you’ll see:
- A higher standard deduction (roughly mid‑$16k for single filers and low‑$32k for married filing jointly, with head of household in the mid‑$24k range).
- Bracket thresholds pushed up by inflation, so a bit more income is taxed at lower rates.
If you don’t have large personal itemized deductions, the larger standard deduction can reduce your taxable income and simplify your return, while you still separately deduct ordinary and necessary on your schedules.
