What Small Business Owners in Eugene Should Know About the 2026 Tax Laws
As 2026 approaches, small business owners in Eugene, Oregon, must prepare for several important tax changes that may directly affect their bookkeeping, deductions, payroll, and overall tax liability. Staying ahead of these updates can help businesses minimize taxes, avoid penalties, and plan more strategically throughout the year.
One of the biggest expected shifts for 2026 is an increase in IRS compliance activity. Federal auditors continue to focus on small businesses—especially sole proprietors, cash-based operations, and LLCs with inconsistent bookkeeping. Eugene entrepreneurs should ensure their financial records are accurate, receipts are stored digitally, and all business expenses are properly categorized. Clean books are no longer optional—they’re a protection in case of an audit.
Another key area to watch is business deductions. Some tax breaks that were expanded in prior years may be tightened or revert to pre-pandemic limits. Bonus depreciation is expected to continue phasing down, which means Eugene businesses purchasing equipment or vehicles will want to carefully plan the timing of these investments. Meal deductions, entertainment expenses, and home office rules may also see adjustments. Working with a CPA early can help maximize these deductions before they change.
Payroll tax rules typically shift each year, and 2026 will be no exception. The Social Security wage base is projected to rise again, affecting the employer share of payroll taxes. Eugene businesses with employees—especially contractors, restaurants, and service companies—should closely monitor these updates. Staying compliant with payroll deposits and quarterly filings is critical to avoiding IRS penalties.
Business structure also remains a major tax strategy lever for 2026. Many Eugene small businesses choose an S-Corp election to reduce payroll taxes, but the IRS continues to scrutinize “reasonable compensation” for owners. If you plan to switch structures or adjust owner payroll, proper documentation is essential. A CPA can help you decide whether your current entity still makes sense.
Oregon-specific issues will also play a role in 2026 tax planning. State tax credits, CAT (Corporate Activity Tax) considerations, local payroll requirements, and industry-specific rules may shift. Real estate investors, assisted living facilities, contractors, and retail businesses should pay special attention to new state-level tax updates.
The best way to prepare for 2026 is through proactive tax planning. Meeting with a CPA before year-end allows you to project your tax bill, take advantage of remaining deductions, and avoid any surprises when filing season arrives. With the right strategy, Eugene business owners can stay compliant, reduce stress, and legally lower their tax liability for the year ahead.