You Asked, We Looked Into It: 2026 Tax Changes for Small Businesses

The maker community asked whether we could dig into the new tax changes under the One Big Beautiful Bill Act (OBBBA) and what they mean for small businesses — specifically, for makers. We're not accountants, but we did do the homework. Here's what changed and why it matters if you run a workshop, studio, or small-batch production operation.

Section 179: Equipment and Capital Expenses

If you buy tools, equipment, furniture, computers, or make qualifying improvements to your workspace, you can now deduct the full purchase price immediately — no more spreading it across years of depreciation schedules. The OBBBA doubled the maximum Section 179 deduction to $2.5 million, with the phase-out threshold starting at $4 million in qualifying purchases (indexed for inflation going forward).

For most makers, you're nowhere near those ceilings. The practical takeaway: if you're buying a new table saw, CNC router, kiln, laser cutter, or welding setup this year, you can very likely write off the full cost in 2026. That also applies to things like shop HVAC systems, dust collection upgrades, and security systems for your workspace.

100% Bonus Depreciation Is Back — and It's Permanent

This one matters. Under the original Tax Cuts and Jobs Act, bonus depreciation was phasing down — it had already dropped to 40% in early 2025 before the OBBBA passed. The new law restored it to 100% and made it permanent. This means if your purchases exceed what Section 179 covers, or if Section 179 doesn't apply to your situation, bonus depreciation picks up the rest. Between the two provisions, you can likely expense most capital investments in full the year you make them.

QBI Deduction for Pass-Through Businesses

If you're a sole proprietor, LLC, S-corp, or partnership — which describes the vast majority of makers — you can deduct up to 20% of your qualified business income. This was set to expire at the end of 2025. The OBBBA made it permanent and expanded the income phase-out thresholds, giving more business owners access to the full deduction.

In plain terms: if your business income flows through to your personal tax return, this deduction is sticking around indefinitely. It's one of the most significant tax benefits available to small businesses, and the fact that it's now permanent means you can plan around it with confidence.

SALT Cap Increased

The state and local tax (SALT) deduction cap has been raised from $10,000 to $40,400 for 2026. If you're in a high-tax state like New York, New Jersey, or California, this gives you meaningfully more room to deduct your state income taxes and local property taxes on your federal return. Note that this increased cap phases down for individuals with modified adjusted gross income above $500,000, and it's temporary — the cap is scheduled to revert to $10,000 in 2030.

What This Means for You

The theme across all of these changes is the same: more flexibility to invest in your business and write it off. If you've been putting off a major equipment purchase, a shop buildout, or a workspace upgrade, the tax math just got more favorable. That said, these provisions interact with each other in ways that depend on your specific situation — your business structure, your income level, your state's conformity with federal tax rules, and your overall tax picture. This post is a starting point, not a substitute for professional advice.

Talk to your accountant. The savings available under these new rules can be substantial, but only if you're set up to take advantage of them.

This post is for informational purposes only and does not constitute tax, legal, or financial advice. Consult a qualified tax professional for guidance specific to your situation.