22 Jun 2026 TAX PLANNING

Inflation and higher borrowing costs continue to squeeze margins, making tax efficiency more important than ever. At the same time, recent 2026 tax changes create planning opportunities that many business owners may overlook, including a higher SALT cap, a permanent 20% QBI deduction, and an expanded Section 179 deduction for qualified purchases. For closely held businesses, the right moves now can improve both current-year cash flow and long-term after-tax returns.

Why This Matters Now

Elevated costs are affecting wages, supplies, freight, insurance, and financing, which can reduce profitability even when revenues are stable. In that kind of environment, business owners should focus on controlling taxable income, preserving liquidity, and timing deductions strategically. The current market also reinforces the value of using tax planning as part of broader financial planning rather than waiting until filing season.

Planning Opportunities

Several 2026 changes are especially useful for small businesses and pass-through entities. The SALT deduction limit increases from $10,000 to $40,000 in 2026 and rises gradually through 2029, which may help owners in higher-tax jurisdictions. The QBI deduction is now permanent, and a minimum deduction applies for certain taxpayers with at least $1,000 in qualified business income. Section 179 also became much more generous in 2026, allowing substantially larger immediate expensing for eligible equipment and technology purchases.

Practical actions to consider include:

• Reviewing whether equipment, software, or vehicle purchases should be accelerated into the current year.
• Rechecking estimated tax payments to avoid penalties and manage cash flow.
• Modeling whether income deferral or expense acceleration produces the better result.
• Evaluating whether the business is structured to maximize the QBI deduction.
• Confirming whether state tax planning or entity-level planning may improve after-tax results.

Cash Flow and Entity Review

For pass-through owners, entity choice and compensation strategy remain important because tax rules continue to reward careful structuring. Higher interest rates also make it more expensive to finance operations, so preserving cash through tax planning can be just as valuable as generating a deduction. Owners should review whether compensation, distributions, retirement plan contributions, and debt repayments are aligned with the business’s expected taxable income.

Closing Guidance

In the current environment, the best tax strategy is usually the one that improves both tax results and working capital. Business owners who act early can better manage inflation pressure, interest expense, and changing deduction rules while avoiding last-minute surprises. A year-end review with a CPA can help identify opportunities before they expire or become less valuable.