Corporate Tax Planning Strategies

Corporate provisions made permanent under OBBBA

The OBBBA carries forward or codifies into permanent law several TCJA provisions that form the structural core of federal corporate taxation, including:

• The 21% federal corporate income tax rate
• The interest limitation framework under §163(j), with the OBBBA incorporating updated computational rules
• The capitalization and amortization requirements for research and experimental expenditures under §174
• Bonus depreciation rules
• International tax rules

TCJA provisions that expired at the end of 2025

Specific TCJA measures that were originally temporary are no longer operative under current law and were not extended by the OBBBA. These include:

• Bonus depreciation phase-out schedules
• Legacy transition and anti-base-erosion measures
• Selected incentives and credit provisions that the TCJA enacted on a time-limited basis and that the OBBBA replaced, consolidated, or allowed to expire

This framework shifts corporate tax planning from anticipating expiration-driven cliffs to navigating a redefined set of permanent federal tax rules, with heightened book-tax differences, tracking conformity across jurisdictions, and integrating new statutory mechanics into provision, forecasting, and fixed asset workflows.

For a detailed breakdown of how the OBBBA restructured federal corporate provisions, including the Corporate Alternative Minimum Tax (CAMT), §163(j) interest deduction limitation rules, §174 capitalization requirements, and changes to cost-recovery systems, see Federal Tax Planning Strategies.

Corporate tax rate

The TCJA’s reduction of the corporate income tax rate to a flat 21% remains permanent under current law, and the OBBBA did not modify this rate. As a result, federal corporate modeling continues to anchor around a stable statutory rate, even as other provisions affecting the effective tax rate have shifted.

From a planning perspective, corporate tax departments must continue to evaluate the interaction between the 21% rate and:

• State conformity rules, which may incorporate federal taxable income but apply their own statutory rates, apportionment methods, and state-specific modifications.
• Corporate alternative minimum tax exposure, particularly for large corporations subject to book-income-based minimum tax calculations, where the statutory rate has limited predictive value without parallel modeling of book adjustments and AMT credit utilization.

Understanding how the 21% federal rate integrates with state income tax calculations and CAMT projections remains essential for accurate forecasting, provision processes, and long-term strategic planning.

Business interest expense deduction limits (§163(j))

Under current law, the deduction for net business interest expense is limited to the sum of a taxpayer’s business interest income, 30% of adjusted taxable income (ATI), and floor plan financing interest. Taxpayers with average annual gross receipts of $31 million or less in 2025 (indexed for inflation) remain exempt from the limitation. The limitation also does not apply to the trade or business of being an employee, to electing real property trades or businesses, to electing farming businesses, or to certain regulated utilities.

The OBBBA did not materially revise the statutory framework of §163(j), leaving its computational structure and key exceptions intact. As a result, the provision continues to function as a core constraint in modeling taxable income, cash tax liability, and book-tax differences.

From a planning perspective, §163(j) is particularly significant for capital-intensive industries and highly leveraged sectors, where interest expense is a substantial component of operating cost structures. Corporate taxpayers in these sectors should maintain forecasting processes to monitor ATI fluctuations, evaluate the benefits of real property or farming elections, and assess potential interactions with state-level conformity rules and the CAMT.

R&E capitalization (§174)

The OBBBA restored a prior law that allowed organizations to immediately write off domestic research and development expenses, reversing a TCJA provision that required five-year amortization (15 years for foreign specified research and experimental (SRE) expenditures). It also allows retroactive write-offs back to 2022 for smaller businesses.

These rules operate in parallel with—but distinct from—the §41 research credit, creating separate computational requirements for deduction timing and credit benefits.

For planning purposes, corporations investing in innovation, product development, and technology should consider whether it makes sense to deduct these expenses immediately or amortize them over time.

Bonus depreciation §168(k) through §168(n)

Under current law, taxpayers may claim 100% bonus depreciation on qualifying property acquired after January 19, 2025, as restored by the OBBBA. This provision applies to tangible property with a class life of 20 years or less, including both new property and used property that hasn’t been used by the taxpayer or a predecessor and meets certain acquisition requirements.

In addition, the OBBBA introduces §168(n), a new temporary full-expensing election for “qualified production property,” which is certain building property used in manufacturing, production, or refining activities, the construction of which begins after January 19, 2025, and before January 1, 2029, and that is placed in service before January 1, 2031.

From a planning standpoint, this permanent bonus depreciation for tangible property with a class life of 20 years or less offers significant benefits for fixed-asset acquisitions and capital budgeting strategies. Corporate tax departments should carefully evaluate whether acquisitions should be structured as asset purchases rather than stock purchases to maximize §168(k) benefits, model the impact of expensing timing on taxable income and cash tax, and align their fixed asset tracking and tax provision systems with the updated eligibility rules—particularly for companies in manufacturing, production, refining, or heavy-equipment sectors eligible for the “qualified production property” election.

Net operating losses (NOLs)

Under current law, NOLs arising in tax years beginning after 2017 may be carried forward indefinitely, but their use is limited to 80% of taxable income in any carryforward year. Pre-2018 NOL carryforwards remain subject to the prior rules and may offset 100% of taxable income. The OBBBA did not alter the existing NOL framework, so the post-TCJA limitations continue to govern corporate NOL utilization.

Certain industries have separate NOL regimes. Farming losses may be carried back two years and carried forward indefinitely. Non-life insurance companies may carry NOLs back two years and forward 20 years, consistent with their industry-specific statutory treatment. Corporate taxpayers may elect to waive any applicable carryback and rely solely on carryforward treatment.

Corporations projecting a current-year loss after applying interim tax-provision estimates may consider the availability of a quick refund for overpaid estimated taxes. Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, may be filed to recover excess estimated tax payments based on expected final liability. Taxpayers with a loss year followed by an income year should also reassess their estimated tax requirements to ensure compliance with annualized income installments and safe-harbor rules.

Because NOLs interact directly with the 80% limitation, CAMT exposure, and state conformity rules, corporate tax departments should integrate NOL modeling into quarterly and annual provision processes, assess potential state-level deviations, and monitor NOL attributes in consolidated and separate-company reporting environments.

Corporate AMT

The corporate alternative minimum tax (CAMT), enacted by the Inflation Reduction Act (IRA) and retained under current law, imposes a 15% minimum tax on the adjusted financial statement income (AFSI) of corporations with average annual financial-statement income exceeding $1 billion over three years (with a separate $100 million threshold for certain foreign-parented groups). CAMT operates alongside, rather than in place of, the regular corporate income tax, requiring taxpayers to compute liability under both regimes.

While the OBBBA did not change the CAMT, other changes that reduce taxable income may negatively affect an organization’s CAMT position.

For example, taxpayers need to consider the CAMT effects of the higher earnings before interest, taxes, depreciation, and amortization (EBITDA) cap on the deduction for interest, 100% bonus depreciation, expensing of research and experimental costs, and changes to the foreign-derived intangible income (FDII) rules.

International corporate tax provisions (post-TCJA corporate tax law & current law)

The OBBBA redefines Global Intangible Low-Taxed Income (GILTI) and Foreign-Derived Intangible Income (FDII). These provisions are now renamed net CFC-tested income (NCTI) and foreign-derived deduction-eligible income (FDDEI), respectively.

It broadens the income base that is subject to the FDDEI deduction, sets the FDDEI deduction rate at 33.34%, leading to an effective tax rate of 14%, and sets the NCTI deduction rate at 40%, resulting in an ETR of 12.6% for tax years beginning after December 31, 2025.

The OBBBA also increases the percentage of deemed-paid foreign taxes under NCTI that can be claimed as a credit from 80% to 90% and eliminates the deemed tangible income return (DTIR) and net deemed tangible income return (NDTIR).

The OBBBA also made 10.5% the new permanent base erosion and anti-abuse tax (BEAT) rate beginning in 2026.

Modifications under OBBBA shape their current operations, but they remain central to international tax planning for U.S. corporations.

Planning ahead: 3 strategies for influencing corporate tax strategy

The OBBBA brought greater certainty to corporate tax strategy, giving tax departments breathing room to shape outcomes that affect their long-term tax positions. Proactive engagement, supported by clear modeling, evidence-based analysis, and timely communication, is essential for protecting core corporate tax provisions.

The following strategies outline how tax departments can strengthen their corporate tax policy strategy.

Evaluate the most impactful corporate tax provisions

Corporate tax departments should identify the federal, state, and international tax provisions that most materially affect their operating model, cash tax position, and long-range ETR. This includes researching current law provisions preserved under OBBBA. Comprehensive internal modeling, using scenario analysis, jurisdictional comparisons, and sensitivity testing, helps quantify the financial impact of proposed or anticipated policy changes.

A clear internal narrative is crucial. Tax teams should prepare technical summaries, talking points, and supporting documentation to articulate how specific provisions influence capital investment, supply-chain decisions, global tax posture, and financial statement outcomes. These materials form the foundation for coordinated internal discussions, executive briefings, and external policy engagement.

Grounding positions in detailed modeling and factual analysis allows corporations to convey the operational significance of priority tax provisions more effectively.

Identify legislative champions to advocate for favorable corporate tax policies

Corporate tax teams should identify and engage with lawmakers who sit on (and staff who support) the tax-writing committees most influential in shaping corporate tax legislation.

Building constructive relationships with committee stakeholders helps lawmakers understand the organization’s technical perspective during drafting, markup, and negotiation phases, where substantive policy decisions are made.

Develop proactive tax mitigation strategies

Businesses should implement forward-looking strategies to monitor, evaluate, and mitigate adverse tax changes that may affect their operating model or policy priorities. This includes conducting structured scenario modeling to assess the financial impact of potential legislative adjustments across federal, state, and international regimes. Incorporating these scenarios into ASC 740 processes allows tax departments to anticipate effects on deferred tax assets and liabilities, valuation allowances, and quarter-end or year-end provision results.

Tax teams should also prepare for potential financial statement disclosures, including uncertainty assessments, sensitivity analyses, and narrative explanations or material tax risks. Coordinating these efforts with finance, legal, and investor-relations functions ensures consistent and accurate reporting.

Where appropriate, organizations may also collaborate with industry peers through coalitions or trade associations to support shared tax policy objectives and strengthen their positions during legislative and regulatory processes.

How does deferring income help?

Income deferral remains a tactical lever for corporate cash flow and ETR management, even under the OBBBA’s continued 21% corporate tax rate stability. If a taxpayer expects taxable income to be higher in one year than the next, or if the taxpayer anticipates being taxed at a lower rate the following year, the taxpayer may benefit by deferring income into that next tax year. Of course, if a business owner is subject to the individual alternative minimum tax (AMT), an S corporation is subject to the passive investment income tax, or a C corporation is subject to the CAMT, this type of standard tax planning may not be warranted. Some ways to defer income are discussed below.

Use of cash method of accounting

In certain circumstances, the cash method of accounting can provide timing benefits by accelerating deductions and deferring income. The accounting method rules and applicable administrative procedures govern elections to adopt or change to the cash method.

A taxpayer generally must obtain IRS consent to change either an overall method of accounting or the accounting treatment of any material item. To do so, the business generally must file Form 3115, Application for Change in Accounting Method.

Certain C corporations and partnerships with a C corporation partner with average annual gross receipts of $31 million or less in 2025 for the prior three tax years can make an automatic change to the cash method. Other entities, including sole proprietors, limited liability companies (LLCs), partnerships, and S corporations, may adopt the cash method when inventories are not a material income-producing factor.

Installment sales

Generally, a sale occurs when property is transferred. If the taxpayer will realize a gain on the sale, the installment method allows the taxpayer to defer income recognition until payments are received, so long as one payment is received in the year after the sale.

If a business expects to sell property before the end of a tax year and it makes economic sense, the taxpayer should consider selling the property and reporting the gain under the installment method to defer payments (and tax) until the next tax year or later.

Delay billing

If a taxpayer uses the cash method of accounting, the taxpayer may consider delaying year-end billing to clients so that payments are not received until the next tax year.

Defer interest and dividends

Corporate taxpayers may achieve timing benefits by carefully timing intercompany interest and dividend distributions, provided changes conform to §482, arm’s-length pricing, and applicable anti-deferral regimes. The terms of related-party financing, such as interest payment schedules or reset mechanisms, can influence when interest is recognized under the taxpayer’s accounting method while remaining compliant with transfer-pricing and documentation requirements.

Similarly, timing the declaration and payment of CFC and other intercompany dividends can affect taxable income, foreign tax credit positions, and inclusions under net CFC tested income. In the current minimum tax environment, corporations should coordinate interest and timing decisions with treasury, transfer pricing, and ASC 740 teams to ensure cash flow strategies align with both regular and minimum tax outcomes.

Should a corporate taxpayer accelerate income into the current year?

With the permanent 21% corporate tax rate, decisions to accelerate income are generally driven not by anticipated rate changes but by the timing of deductions, credits, and exposure to CAMT. Corporations may benefit from accelerating income when doing so enables the use of deductions or credits that may be limited, less valuable, or unavailable in a later year, or when income recognition aligns more favorably with the timing of foreign tax credits, §163(j) limitations, or §174 capitalization effects.

However, accelerating income can be disadvantageous when it creates the likelihood of CAMT liability, reduces the value of future-year deductions, or negatively affects quarterly provisions results. Corporate tax departments should evaluate income timing strategies through integrated modeling that considers regular tax, CAMT, book-tax differences, and financial statement implications before deciding whether acceleration is beneficial under current law.

Early collection

A business that reports business income and expenses on a cash basis could issue bills and pursue collection before the end of the current year. Also, the taxpayer could check whether clients or customers are willing to pay for next year’s goods or services in advance. Any income received using these steps will shift income from the next tax year to the current one.

Qualified dividends

Qualified dividends are subject to rates similar to those for capital gains. Qualified dividend income for individual taxpayers is generally subject to a 15% or 20% rate, depending on statutory thresholds. The thresholds are not tied to specific income tax brackets, but roughly speaking, the 20% rate applies to those in the 37% rate bracket and most of those in the 35% bracket, while the 15% rate applies to those at or above the 22% bracket. Note that qualified dividends may be subject to an additional 3.8% net investment income tax. Qualified dividends are typically dividends from domestic and certain foreign corporations. The corporate board may consider the tax implications of declaring a dividend to shareholders. If a controlling shareholder is not in the highest capital gains bracket for the current tax year but expects to be in a higher bracket next year, the controlling shareholder should consider authorizing any dividend payment before the end of the current tax year to take advantage of the more favorable 15% tax rate.

Are there business deductions that can be accelerated into the current year?

As part of year-end corporate tax planning, taxpayers should evaluate opportunities to accelerate allowable deductions, provided they are consistent with accounting method rules and financial statement objectives.

Bad debts

Analyze business accounts receivable and write off those that are totally or partially worthless. By identifying specific bad debts, the taxpayer should be entitled to a deduction. The taxpayer may be able to complete this process after year-end if the write-off is reflected in year-end financial statements.

Current-year bonuses

In general, a taxpayer’s liability for employee bonuses accrues and is deductible in the current year, even though the bonus is paid in the following year, if all the events that fix the liability occur and the taxpayer does not have a unilateral right to cancel the bonus at any time before payment.

Generally, the taxpayer may accelerate the bonus deduction into the current year, while employees will report the income in the following year if they are cash-method taxpayers. Furthermore, any compensation arrangement that defers payment will be currently deductible only if paid within 2.5 months after the employer’s year-end.

Suspended passive losses

Generally, a taxpayer may have suspended passive losses that have not yet been allowed as a deduction. Determine what might be done to identify and absorb or release the suspended losses as part of the taxpayer’s overall tax planning.

Prepayment of taxes

For taxpayers who pay payroll taxes quarterly, consider accelerating 4th-quarter payroll taxes at year-end on Dec. 31 rather than waiting until January.

Consider accelerating state income, estimated taxes, and property taxes (if possible) if the taxpayer would benefit from a current-year state income tax deduction.

What tax credits are available to corporate taxpayers?

Corporate tax credits continue to play a critical role in managing effective tax rates and cash flow. The Inflation Reduction Act and the OBBBA have reshaped the availability and structure of these incentives. As corporations prepare for 2026 and beyond, tax departments should reassess eligibility, model credit interactions with CAMT and regular tax limitations, and evaluate whether changes to operational footprint, energy strategy, or capital investment plans could benefit credit utilization under current tax law.

Research and Experimentation (R&E) Tax Credit

Some business projects, such as those involving development of new or more reliable products, processes, or techniques, may be eligible for the R&E tax credit. Eligible small businesses (average annual gross receipts of $50 million or less) may claim the R&E tax credit against the alternative minimum tax liability of individuals, and certain qualified small businesses can use the credit against the employer’s payroll tax (i.e., FICA) liability.

Employer wage credit for employees in the uniformed services

Some employers continue to pay all or part of employees’ wages while they are called to active service. The credit equals 20% of the first $20,000 of differential wage payments to each employee for the taxable year. Employers of any size with a written plan for providing such differential wage payments are eligible for the credit.

Work opportunity credit

The work opportunity credit is an incentive for employers that hire individuals from groups whose members have historically had difficulty obtaining employment. The credit gives a business a greater opportunity to hire new workers and to be eligible for a tax credit based on wages paid. The credit is available for first-year wages paid or incurred in the tax year for employees hired and who began work before Dec. 31 of that tax year. Employers that hire members of targeted groups, including qualified long-term unemployed individuals (i.e., those who have been unemployed for 27 weeks or more), are eligible for a credit equal to 40% of the first $6,000 of wages. Employers that hire qualified veterans will be entitled to a credit equal to 40% of a higher wage limit, with the wage limit dependent on the reason for qualification.

The WOTC is available for wages paid to qualified employees who begin work on or before December 31, 2025.

Small employer pension plan startup cost credit

Certain small business employers that didn’t have a pension plan for the preceding three years may claim a nonrefundable income tax credit for expenses of establishing and administering a new retirement plan for employees. The credit applies to 50% of qualified administrative and retirement-education expenses for each of the first three plan years. The credit is limited to the greater of (a) $500, or (b) the lesser of (i) $250 for each eligible employee, or (ii) $5,000. Thus, the maximum available credit is limited to $5,000 per year.

Small employer retirement savings auto-enrollment credit

Certain small business employers that include an eligible automatic contribution arrangement in a qualified employer plan may claim a nonrefundable income tax credit of $500 for each of the first three plan years.

Employer-provided child care credit

Employers may claim a credit of up to $150,000 for supporting employee child care or child care resource and referral services. The credit is allowed for a percentage of “qualified child care expenditures,” including property used as part of a qualified child care facility, operating costs of a qualified child care facility, and resource and referral expenditures.

Low-income housing credit

The low-income housing credit may be claimed over 10 years by owners of residential rental property used for low-income housing. The credit amount depends on whether expenditures were federally subsidized. Among other requirements, low-income housing units may not be used on a “transient” basis. The IRS and Treasury have provided limited exceptions to the transiency rule, including one for disaster relief.

After a major disaster, a state housing credit agency may permit owners within its jurisdiction to provide temporary emergency housing (not to exceed 12 months) to displaced individuals who were living within the agency’s jurisdiction at the time of the disaster. Before housing any displaced individuals, the owner must obtain written approval from the agency to participate in “temporary emergency housing” relief. An individual is a displaced individual if the individual was displaced from their principal place of residence because of a major disaster and the principal place of residence is in a city, county, or other local jurisdiction designated for “individual assistance” by FEMA. The temporary housing of displaced individuals in low-income units without meeting the documentation requirements will not cause the building to suffer a reduction in qualified basis that would cause the recapture of low-income housing credits.

Employer credit for Family and Medical Leave Act wages

An eligible employer may take a paid family and medical leave (PFML) credit (§45S) of between 12.5% and 25% of the wages paid to the employee, depending on what portion of the employee’s normal wages is paid during the leave (minimum 50% of wages).

Prior to the OBBBA, the §45S credit was temporary and not widely used because it was difficult for employers to meet the eligibility requirements. The OBBBA modified the eligibility requirements starting in 2026 and made the credit permanent.

It also now allows employers in states with mandatory PFML programs to claim the credit for employer-funded paid leave that exceeds state-mandated benefits.

New Markets Tax Credit

Eligible taxpayers may claim a New Markets Tax Credit equal to 39% of any capital invested in a qualified community development entity. The credit is claimed in seven annual installments beginning in the year of the original investment.

Clean Electricity Investment Credit

The Clean Electricity Investment Credit replaced the Energy Investment Tax Credit that phased out at the end of 2024.

The credit is available to taxpayers with a qualified facility and energy storage technology placed in service after December 31, 2024. The base credit amount is 6% of the qualified investment. Additional bonus credits are available for facilities that meet prevailing wage and registered apprenticeship requirements, facilities that meet certain domestic content requirements for steel, iron, and manufactured products, and facilities located in an energy community.

The OBBBA accelerates the scheduled phase-out of the credit. For most technologies, the credit begins to phase out for facilities that begin construction in 2034 or later. Solar and wind facilities must be placed in service before 2028 unless construction begins before July 5, 2026.

Rehabilitation tax credit

Qualified expenses incurred for the rehabilitation of certified historic structures are eligible for a 20% credit. The credit is claimed in five equal annual installments beginning with the year in which the rehabilitated property is placed in service.

What income exclusions are available?

Stock acquisitions that qualify as “small business stock” under §1202 are subject to special exclusion rules upon their sale as long as a five-year holding period is satisfied. S corporation stock does not qualify for the exclusion. A noncorporate taxpayer may exclude 100% of gain from the sale of qualified small business stock acquired after Sept. 27, 2010, and held for more than five years. A 75% exclusion applies for qualified small business stock acquired after Feb. 17, 2009, and before Sept. 28, 2010 (and held for at least five years). A 50% exclusion applies for qualified small business stock acquired before Feb. 18, 2009 (and held for at least five years).

The OBBBA amended §1202 to provide different percentage exclusions based on the holding period of stock acquired after July 4, 2025. A 50% exclusion applies for qualified business stock held for at least three years; a 75% exclusion applies if stock is held for at least four years; and a 100% exclusion applies if stock is held for at least five years.

What business deductions are available?

Qualified business income

Individual taxpayers with qualified business income (QBI) from a pass-through entity (partnership, LLC, S corporation, trust, or estate) or a sole proprietorship may be entitled to a deduction equal to the lesser of the deductible amount of the QBI or 20% of taxable income. The deduction reduces taxable income and is available whether or not the taxpayer itemizes. The deduction does not impact the calculation of self-employment tax.

No deduction is allowed for income from the trade or business of being an employee.

For 2026, if the taxpayer’s taxable income (not factoring in the deduction) exceeds $403,500 (for married taxpayers filing jointly) or $201,775 (for all other taxpayers), the deduction is subject to a limitation based on W-2 wages paid by the business.

The OBBBA made the QBI deduction permanent and added a minimum deduction of $400 for taxpayers with QBI over $1,000, starting in 2026.

Excess business loss

Taxpayers other than C corporations are not allowed to deduct excess business loss. An excess business loss for the tax year is the amount by which aggregate deductions of the taxpayer attributable to trades or businesses of the taxpayer, less the sum of aggregate gross income plus $512,000 (for married taxpayers filing jointly) or $256,000 (for all other taxpayers), adjusted for 2026 inflation. Any excess business loss is carried forward and treated as part of the taxpayer’s net operating loss carryforward in succeeding taxable years. Pass-through entities are limited in deducting active business losses against non-business income.

Equipment purchases

Corporations purchasing equipment may make a “§179 election,” which allows them to expense (i.e., currently deduct) otherwise depreciable business property, including computer software and qualified real property. Air conditioning and heating units placed in service since 2016 are eligible for this deduction. Certain improvements to nonresidential real property (roofs, heating, ventilation, and air-conditioning property, fire protection and alarm systems, and security systems) that may not be eligible for bonus depreciation are eligible under §179.

The OBBBA increases the maximum deduction from $1,000,000 to $2,500,000 and the phaseout threshold from $2,500,000 to $4,000,000 for property placed in service during taxable years starting after 2024. According to projected figures based on statutory requirements for annual inflation adjustments, the OBBBA also indexes the amounts for inflation, increasing the 2026 maximum to $2,560,000 and the 2026 threshold to $4,090,000. The deduction is subject to a business income limit.

Carefully timing equipment purchases can result in favorable depreciation deductions. In general, under the “half-year convention,” taxpayers may deduct six months’ worth of depreciation for equipment that is placed in service on or before the last day of the tax year. If more than 40% of the cost of all personal property placed in service occurs during the last quarter of the year, however, a “mid-quarter convention” applies, which lowers the depreciation deduction.

[View estimated figures reflecting statutory annual inflation adjustments and download our free 2026 Projected U.S. Tax Rate report.]

Vehicles weighing more than 6,000 pounds

A popular strategy is to purchase a vehicle for business use that exceeds the statutory depreciation limits (i.e., a vehicle rated at more than 6,000 pounds). Doing so wouldn’t subject the purchase to the $12,400 depreciation limit for passenger vehicles in 2026 (if bonus depreciation is taken, the limit increases to $20,400). For SUVs (rated between 6,000- and 14,000-pounds gross vehicle weight), the expensing limit is $32,000.

Inventories of subnormal goods

A business should check its inventory for substandard goods. Subnormal goods are goods that are unsalable at normal prices or unusable in the regular way due to damage, imperfections, shop wear, changes of style, odd or broken lots, or other similar causes, including second-hand goods taken in exchange. If a business has subnormal inventory at the end of the tax year, the taxpayer can take a deduction for any write-downs associated with that inventory, provided the inventory is offered for sale within 30 days of the inventory date. The inventory does not have to be sold within the 30-day timeframe.

Business travel and meals expenses

Although limited, business meal deductions are still available in certain circumstances.

Charitable contributions

A charitable contribution deduction is available to businesses. A corporation is generally allowed to deduct charitable contributions up to 10% of its taxable income for cash contributions. Contributions from pass-through entities are allocated to individual equity interest holders and are subject to the individual’s limitations. An individual is generally allowed to deduct charitable contributions up to 60% of adjusted gross income (AGI). Certain contributions of property are subject to additional limits as well as additional recordkeeping and substantiation requirements.

The OBBBA imposed a new floor for deducting charitable contributions. Starting in 2026, corporate charitable donations below 1% of taxable income are not deductible and individual charitable donations below 0.5 percent of AGI are not deductible.

What health care and other benefit planning is available?

Under current law, the OBBBA retains the Affordable Care Act’s core excise tax provisions applicable to employer-sponsored health plans while introducing targeted updates to certain benefit-related credits and incentives. As a result, corporate tax departments should reassess their benefit plan structures, credit eligibility, and compliance frameworks to ensure they align with current law.

Pay or play excise tax

A corporate taxpayer that has 50 or more full-time equivalent employees could be subject to an excise tax, which could be as much as $3,340 per full-time employee, for failure to offer a health care plan that is minimum essential coverage to at least 95% of the full-time employees if at least one employee obtains subsidized coverage through a public health insurance exchange. The first 30 workers are excluded from this calculation. If the taxpayer offers coverage that is inadequate or unaffordable, the excise tax could be $5,010 per full-time employee who obtains subsidized coverage through an exchange.

Smaller employers should review whether they have undergone, or will soon undergo, any changes to their business structure that would require them to be aggregated with other entities and subject them to potential liability. Larger employers should consider their health care plan options in light of this potential excise tax liability.

Health reimbursement arrangements

Certain small employers who want to help their employees obtain health insurance may set up a qualified small employer health reimbursement arrangement (QSEHRA). The QSEHRA, unlike other health reimbursement arrangements, is a tax-favored arrangement that is not considered a group health plan and does not expose the employer to excise taxes for failing to satisfy Affordable Care Act insurance market requirements. It’s available to employers with fewer than 50 full-time equivalent employees, no offered group health plan, and that meet other requirements.

Small employer health insurance credit

Some small employers that provide health coverage to their employees through a Small Business Health Options Program (SHOP) Exchange may be eligible to claim a credit if they pay at least half of the premiums for their employees’ health insurance. Generally, employers with 25 or fewer full-time equivalent employees (FTEs) and an average annual per-employee wage of $68,200 or less are eligible. The credit amount begins to phase out for employers with 11 FTEs or an average annual per-employee wage of more than $34,100. The credit is available on a sliding scale for up to 50% of the employer’s contribution toward employee health insurance premiums. The credit is available only for two consecutive taxable years.