8 Key Moves to Minimize Tax Exposure and Maximize the New Tax Laws in the One Big Beautiful Bill
The period right after you file your taxes is the most strategic moment to begin planning for the current tax year. With federal tax laws under the One Big Beautiful Bill now in place, there are likely some key deductions and potential liabilities you should consider as we enter the planning season for tax year 2026. Tax planning should also include Michigan state tax law updates and considerations if you own a business that operates with a Michigan tax nexus.
Michigan business owners should start tax planning in May and June 2026 to take actions which can strengthen cash flow, reduce tax exposure, and prepare for compliance updates. This checklist provides both the action steps and the context behind why each one matters.
1. Reassess Your Federal Tax Position for 2026
Action items:
- Review how the permanent 100% bonus depreciation rules affect your capital investment plans.
- Confirm whether your current entity structure maximizes the 20% Qualified Business Income (QBI) deduction.
- Evaluate whether immediate expensing of domestic R&D costs benefits your business or whether capitalization still makes sense.
Federal tax law now offers more predictability, especially with bonus depreciation and QBI made permanent. This is the ideal time to learn how these provisions affect your long‑term strategy rather than waiting until year‑end.
2. Update Your Michigan‑Specific Tax Strategy
Action items:
- Determine whether electing into Michigan’s Flow‑Through Entity (FTE) tax will reduce your federal SALT burden.
- Note the new FTE election deadline: the last day of the ninth month after year‑end (September 30 for calendar‑year filers).
- Prepare for Michigan’s 2026 minimum wage increase to $13.73 and adjust payroll budgets accordingly, if needed.
- Update payroll systems to account for the 2026–2028 exemption of qualified tip income and overtime pay from Michigan income tax.
- Review your sick‑leave policies to ensure compliance with the strengthened Earned Sick Time Act enforcement.
Michigan’s 2026 changes affect payroll, tax elections, and HR compliance. Early preparation prevents rushed decisions and ensures you capture available tax benefits.
Need more insights on workforce or talent management? Check out McComb & Company’s 2026 Workforce Management eBook for Small Businesses.
3. Schedule a Post‑Filing Review of Your 2025 Return
Action Items:
- Identify any missed credits or deductions that can be captured in 2026.
- Review retirement plan contributions and determine whether increasing them in 2026 would reduce taxable income.
- Evaluate whether depreciation choices made for 2025 align with your 2026 investment plans.
Your 2025 filed tax return is a roadmap that reveals patterns, gaps, and opportunities to address immediately rather than waiting until next tax season. Schedule a tax planning appointment with one of McComb & Company’s Michigan CPAs and tax professionals here.
4. Begin Cash‑Flow Modeling for 2026
Action Items:
- Project payroll cost increases tied to Michigan’s wage changes.
- Model the impact of tip‑income and overtime tax exemptions on withholding and cash flow.
- Estimate the timing and cost of capital investments under the permanent bonus depreciation rules.
- Plan for potential lump‑sum payments if you elect into the Michigan FTE tax later in the year.
Cash‑flow planning is especially important in 2026 because both federal and state rules influence the timing of deductions and payroll obligations.
5. Update Compliance, HR, and Payroll Systems
Action Items:
- Refresh employee handbooks to reflect Michigan’s updated sick‑leave and wage rules.
- Ensure payroll software is updated for 2026 withholding and exemption changes.
- Conduct an internal HR compliance audit before Q3.
Michigan’s regulatory environment is tightening, and enforcement is increasing. Proactive updates reduce the risk of penalties and employee disputes.
6. Plan Capital Investments Early
Action Items:
- Map out equipment purchases for the year rather than waiting until December.
- Coordinate financing and vendor timelines to ensure assets are placed in service during 2026.
With bonus depreciation now permanent, you can plan investments strategically instead of rushing at year‑end. This is especially beneficial for Michigan’s manufacturing, construction, hospitality and healthcare sectors.
7. Reevaluate Charitable Giving Strategies
Action Items:
- Review your 2025 charitable contributions and determine whether they were deductible.
- Identify contributions that may qualify as business expenses rather than charitable deductions.
- Document all giving to ensure compliance with the new 1% AGI limitation for corporate charitable deductions.
The new federal limitation makes documentation and classification more important than ever. Some contributions may be more advantageous when treated as business expenses.
8. Mark Key Michigan Tax Deadlines for 2026
Action Items:
- March 31: File the annual FTE return for 2026.
- September 30: Last day to elect into the FTE tax for 2026 (calendar‑year filers).
- April 15, June 15, September 15: Estimated tax payment deadlines.
- January 15, 2027: Final estimated payment for 2026.
Missing these deadlines can trigger penalties or eliminate your ability to make certain elections. Adding them to your calendar now prevents costly oversights.
Ready to Build a Stronger 2026 Tax Strategy?
Every business is different, and the most effective tax plan is one that’s tailored to your specific goals, structure, and cash‑flow needs. If you want clarity, confidence, and a proactive roadmap for the year ahead, the McComb Tax Team is here to help.
Contact the McComb & Company Tax Team tax planning consultation.
We’ll walk through your 2025 return, identify opportunities for 2026, and build a plan that supports both your business and your long‑term financial strategy.