Business Changes 2026 : What Entrepreneurs in the U.S. Need to Know
1) The One Big Beautiful Bill: A Tax Game-Changer
The biggest single development for U.S. business owners in 2026 is the full rollout of the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. This legislation reshapes the tax landscape for small businesses in several significant ways.
The 20% Qualified Business Income (QBI) deduction, which was set to expire at the end of 2025, is now permanent. If you run a sole proprietorship, LLC, S-corp, or partnership, you can continue deducting up to 20% of your qualified business income. A new minimum guarantee also applies: anyone earning at least $1,000 in qualified business income will receive a deduction of at least $400, even if the deduction would otherwise phase out.
100% bonus depreciation is back — and this time it's permanent, too. You can now deduct the full cost of qualifying equipment, machinery, and certain improvements in the year you buy them, including used property. Combined with the Section 179 expensing limit, which has been raised to $2.5 million, this is a significant cash-flow boost for businesses investing in growth.
Employers who offer childcare benefits get a major upgrade as well. The employer-provided childcare tax credit now covers up to 40% of eligible costs (50% for qualifying small businesses), with the annual cap rising from $150,000 to $500,000 ($600,000 for small businesses). Small businesses can also pool resources with other companies to jointly operate or contract childcare services.
2) Tariffs: Higher Costs, Uncertain Future
Trade policy continues to be a source of unpredictability. Tariff levels remain 8 to 10 times higher than they were at the start of 2025, according to the U.S. Chamber of Commerce. While businesses absorbed much of the cost last year, that's starting to change — many companies are now passing tariff costs on to customers in 2026.
The U.S. Supreme Court is currently reviewing whether tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were lawful. If ruled illegal, businesses that paid those tariffs may be eligible for refunds. However, tariffs on Chinese goods, steel, and aluminum fall under separate statutes and would likely remain in place regardless of the ruling.
3) Minimum Wages and Workforce Challenges
The federal minimum wage remains unchanged at $7.25 per hour — a rate that hasn't moved since 2009. But on the state and local level, the picture looks very different. In 2026, 22 states and dozens of cities and counties are raising their minimum wages. Washington state leads at $17.13 per hour, with New York City, Long Island, and Westchester at $17.00. Florida will reach $15.00 per hour in September 2026.
If you have employees in multiple states, make sure you're paying at least the highest applicable rate for the location where each employee works.
Meanwhile, workforce challenges persist. The proposed $100,000 fee per H-1B visa is making it harder — and far more expensive — for small businesses to hire foreign workers. The U.S. Chamber of Commerce notes that three-quarters of H-1B users are actually small businesses, many hiring just a single foreign employee.
4) BOI Reporting: Relief for Domestic Companies
One regulatory burden that's been lifted: Beneficial Ownership Information (BOI) reporting is no longer required for U.S.-formed companies. An interim rule issued in March 2025 exempted all domestic entities from reporting to FinCEN. The requirement now applies only to foreign-formed entities registered to do business in the U.S.
Keep in mind that some states are implementing their own transparency rules. New York's LLC Transparency Act, which took effect January 1, 2026, requires foreign-formed LLCs doing business in New York to report beneficial ownership information to the state.
5) The Economy and Interest Rates
Inflation has cooled but remains at around 2.7% — still above the Fed's 2% target. Interest rates are expected to stay flat through at least the first half of 2026, with potential rate cuts later in the year. If you're planning to borrow for expansion or equipment, factor in the current cost of capital when making your decision.
1. What is the OBBBA and how does it affect my business?
The One Big Beautiful Bill Act is a comprehensive tax law signed in July 2025. It makes the 20% QBI deduction permanent, restores full bonus depreciation, raises 1099 reporting thresholds, and expands employer childcare credits — all starting in 2026.
2. Do I still need to send a 1099 to every contractor I hire?
Only if you pay them $2,000 or more in a calendar year (up from $600). This new threshold applies to 1099-NEC and 1099-MISC starting in 2026. However, all income is still taxable regardless of whether a 1099 is issued.
3. What's happening with tariffs in 2026?
Tariffs remain significantly elevated, and the Supreme Court is reviewing their legality under the IEEPA. Businesses may receive refunds if those tariffs are struck down, but tariffs on Chinese goods and metals are likely to persist.
4. Has the federal minimum wage changed?
No. The federal minimum wage is still $7.25 per hour. However, 22 states and dozens of local jurisdictions raised their minimum wages in 2026, with rates ranging from around $13 to over $17 per hour.
What Should You Do Now?
Review your tax strategy with a qualified professional to take full advantage of the OBBBA changes. Audit your supply chain for tariff exposure. Check minimum wage requirements in every state and city where you have workers. And keep your invoicing and contractor payment records organized — even though the 1099 thresholds have increased, accurate bookkeeping remains essential.
