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Welcome to 2026: Kickstart Your Year with Smart Tax Strategies
1/3/20262 min read
Welcome to 2026: Kickstart Your Year with Smart Tax Strategies
Your Trusted CPA Partner for a Prosperous New Year
Happy New Year from all of us at Andrew Chen CPA LLC! As we step into 2026, now is the perfect time to look ahead - not just with optimism, but with intention. January isn’t just for resolutions; it’s the ideal month to lay down the financial groundwork that sets the tone for the entire year. With recent changes brought about by the One Big Beautiful Bill (OBBB) - the sweeping tax and fiscal legislation passed in late 2025 - there’s never been a more critical time to reassess your tax strategy.
Below are three actionable steps business owners can take this month to maximize deductions, reduce tax liability, and take full advantage of the new opportunities created by the OBBB.
1. Revisit Your Entity Structure & Bonus Depreciation Strategy
The One Big Beautiful Bill extended 100% bonus depreciation for qualified property placed in service through December 31, 2026—a last-chance window for businesses looking to invest in equipment, technology, or vehicles. If you’ve been considering capital expenditures, January is the time to finalize your acquisition plans.
Action Step: Schedule a quick consultation with your CPA to:
Confirm eligibility for full bonus depreciation under current rules.
Evaluate whether accelerating purchases into early 2026 makes sense for your cash flow and tax bracket.
Consider whether your business structure (LLC, S-Corp, C-Corp, etc.) is still optimal under the OBBB’s revised rate schedules and deduction thresholds.
Pro Tip: The OBBB also introduced a phase-out of the Section 179 expensing limit for businesses with total asset acquisitions exceeding $3.1 million in 2026—so timing and planning matter more than ever.
2. Maximize R&D and Innovation Tax Credits - Now Enhanced
One of the OBBB’s hidden gems is the expansion of the R&D Tax Credit to include more service-based and software development activities, and – critically - it now allows qualified small businesses (under $10M in gross receipts) to apply the credit directly against payroll taxes for up to $500,000 annually (up from $250,000).
Action Step: Even if you’ve never claimed the R&D credit before, January is the time to:
Document qualifying activities from 2025 (new product development, process improvements, software customization, etc.).
Work with your CPA to conduct a preliminary R&D credit study.
Adjust your 2026 payroll and innovation budget to strategically increase eligible expenditures.
3. Review & Optimize Retirement Plan Contributions
The OBBB increased the 2026 contribution limits for employer-sponsored retirement plans and introduced a new “Startup Retirement Plan Credit” for small businesses launching their first 401(k) or SIMPLE IRA in 2026. Eligible employers can now claim a credit of up to $6,000 per year for three years to offset setup and administrative costs.
Action Step: In January:
Decide whether to adopt or enhance a retirement plan - both to attract talent and reduce taxable income.
If you already have a plan, confirm your employee deferral and employer match strategy aligns with the new limits:
401(k) employee deferral limit: $23,500 (up from $23,000 in 2025)
Catch-up contribution (age 50+): $7,500
Total combined limit (employee + employer): $69,000
Final Thoughts
The One Big Beautiful Bill brought both opportunities and complexity. But with proactive planning in January - before the year gains momentum - you can turn tax compliance into a strategic advantage.
At Andrew Chen CPA LLC, we’re here to help you navigate these changes confidently. Book your 2026 Tax Strategy Session by January 31st, and we’ll provide a complimentary review of your current structure in light of the OBBB updates.
Here’s to a financially empowered 2026!
Andrew Chen, CPA
(908) 300-9816