New tax deductions for small businesses in 2026

The 2026 tax season brings a series of significant changes driven by the IRS, especially focused on Small Business Owners and independent contractors (1099).

1. Home Office Deduction

If you work from home, the IRS has relaxed the requirements to qualify for the home office deduction. It no longer needs to be a separate room with a door; a space designated exclusively for work can now qualify using the simplified method.

2. Corporate Vehicle Expenses

The standard mileage rate has increased. If you use your personal vehicle for business meetings, visiting clients, or delivering products, it is crucial to keep a mileage log to maximize your return this year.

3. Bonus Depreciation

Although bonus depreciation is gradually phasing down under current law, you can still deduct a significant portion of the cost of machinery, office equipment, and computers purchased and placed in service during the tax year.