2025 Tax recap and 2026 preview for accounting firms

Capex and R&D helping clients avoid pitfalls and make well-supported elections

As clients look ahead to 2026, accounting firms will need to guide them through several important Capex and R&D decisions that are more complex than they appear at first glance. Although permanent bonus depreciation under Section 168(k) and the ability to expense domestic R&D costs offer clear tax advantages, the related elections can carry unexpected consequences.

A major area where clients may need support is retroactive R&D expensing. While this option may seem attractive, especially for smaller businesses considering amended returns, it is not a simple or automatic benefit. Retroactive expensing can trigger several follow-on effects, including the need to address the §280C loophole and apply recently issued rules for changes in accounting method. Because of these interdependencies, firms should help clients model the full impact before making an election and ensure the supporting documentation is complete.

Another challenge involves clients in real property trades or businesses that previously elected out of §163(j). While this election provided relief from interest-limitation rules, it also made those businesses ineligible for §168(k) bonus depreciation. Now that bonus depreciation is permanent, many clients are reconsidering their earlier choice. However, current guidance offers very limited flexibility to unwind a §163(j) election, leaving taxpayers with constrained options.

In 2026, firms can add real value by helping clients understand these trade-offs, evaluate the broader effects of their elections, and prepare well-supported positions while additional guidance remains pending.

Corporate Alternative Minimum Tax (CAMT): Managing a minimum tax that quietly reduces other benefits

In 2026, firms will need to help clients navigate a minimum-tax system that is increasingly shaping the value of major incentives. A central concern is the way CAMT interacts with provisions introduced by the OBBBA. As noted in recent discussions, CAMT has become the “silent killer” of those benefits, especially where deductions such as §174 expensing appear favorable under the regular tax system but provide little advantage once the CAMT calculation is applied.

This tension is driving active debate, including comment letters from trade groups and differing political views on how far the IRS should go in excluding items from CAMT or easing its impact. Some lawmakers are pushing to limit further administrative relief, while others may seek legislative changes if a future reconciliation bill becomes available.

From an operational perspective, firms should be prepared to explain the high degree of optionality built into the current CAMT framework. Taxpayers can use multiple computational paths to determine whether they are subject to CAMT, but each path comes with its own data requirements. Because there is no requirement to disclose which path a taxpayer is using, companies may feel pressure to maintain several parallel sets of books to keep all options open, creating significant administrative strain.

Although some recent guidance has softened harsh edges such as cliff effects, CAMT still requires careful modeling. For 2026, firms can help clients understand how CAMT may reduce the value of incentives they expect to rely on, evaluate which computational paths are sustainable, and manage the recordkeeping burden that comes with maintaining multiple CAMT-related calculations.

International: Helping clients adjust to new timing, inclusions, and modeling requirements

International tax changes will remain an important advisory area in 2026 as clients work through several updates that significantly affect timing, inclusions, and forecasting. Recent guidance eliminated the one-month CFC deferral, forcing controlled foreign corporations to align their taxable years with U.S. parent timing. This shift also brought new rules for allocating foreign tax credits between the short year and 2026, requiring careful planning to avoid mismatches.

Clients will also need help understanding the impact of expanded pro-rata share inclusion rules, which now pull more taxpayers into subpart F and tested-income calculations. Many businesses that previously assumed they were not shareholders at the relevant measurement date may now face additional inclusions. These changes affect a wide range of models, and firms should be prepared to help clients evaluate the downstream impact on income calculations, baskets, and reporting processes.

A dividend transition rule has been issued, but several open questions remain. Because longstanding assumptions about timing and attribution no longer apply, firms should remind clients that older modeling approaches may no longer be reliable, and updated forecasting tools will be needed.

Finally, changes to the Section 250 deduction, including updates to which income is excluded and how intangible property sales are treated, mean clients may need support reassessing their deduction calculations and cross-border planning assumptions.

Together, these developments make international planning more complex, and firms will play an essential role in helping clients understand the new timing rules, avoid inclusion surprises, and rebuild models that reflect the updated guidance.

Energy credits & §1202: Supporting clients through uncertainty and expanding opportunities

Energy-related tax incentives will continue to be an important area for firms in 2026, as clients face evolving rules and ongoing uncertainty about how various eligibility standards will ultimately apply. As noted in late-2025 discussions, many taxpayers are unsure how to proceed in good faith when guidance remains incomplete, especially in areas involving critical minerals, lifecycle assessments, and other requirements tied to clean-energy credits. Some of the most impactful changes are still expected to come through additional sub-regulatory guidance, leaving businesses hesitant to take steps that may not be reversible later.

Separately, changes to §1202 (Qualified Small Business Stock) remain a growing point of interest. Expanded eligibility has increased demand for clear guidance, as many taxpayers want to understand how the new rules apply to their ownership, business activities, and future exit plans. Even though §1202 can offer significant long-term tax benefits, its requirements depend heavily on timing, issuer qualification, and historical transactions, areas where clients often need structured review and clear explanations.

Together, these developments make energy credits and §1202 strong advisory opportunities for 2026. Firms can provide valuable support by helping clients interpret uncertain rules, document their positions, and evaluate how new incentives may fit into long-term planning.

Operating environment: Navigating IRS backlogs and a shifting regulatory landscape

In 2026, firms should prepare clients for an operating environment shaped by two major forces: the IRS’s post-shutdown backlog and the broader effects of the Loper Bright decision on tax regulation.

First, the federal shutdown created significant delays. Clients should expect slower processing times and should plan for longer cycles when submitting requests or waiting for responses. The situation is made more challenging by long-standing issues: the IRS remains understaffed, and its technology still lags behind what many taxpayers assume, especially given new demands created by OBBBA-related form changes.

Second, firms will need to help clients understand the regulatory uncertainty created by the Loper Bright Supreme Court decision. With the prior Chevron framework overturned, courts can now apply their own interpretation of ambiguous statutes, which may lead to less uniformity and increased scrutiny of tax regulations.

Looking ahead, firms should help clients manage expectations around timing, strengthen support for technical positions, and monitor how regulatory interpretations evolve as more Loper Bright-related decisions make their way through the courts.

2026 Focus: Strategic priorities for accounting firms

Strengthen client education on elections and credits. Clients will face multiple decision points in 2026 regarding depreciation, R&D expensing, energy incentives, and state-specific conformity considerations. Firms should develop clear educational materials to help clients understand their options and the implications for cash-flow management and compliance.

Integrate CAMT into provision and planning workflows. Minimum-tax computations should be embedded into recurring advisory processes rather than evaluated only at year-end. Incorporating CAMT diagnostics into quarterly meetings, estimated-tax calculations, and ASC 740-related engagements will help clients maintain consistent reporting, avoid forecast volatility, and make informed planning decisions.

Expand advisory services for energy and international tax planning. Energy incentives will continue to require attention. Firms with established processes for reviewing transferability structures, preparing substantiation packages, and advising clients on ongoing guidance updates will be well positioned to capture demand.

International tax developments will also continue to require planning and support. Firms may benefit from formalizing international advisory packages tailored to clients undergoing structural changes or expansion.

The bottom line

As clients contend with rapid regulatory change and increased scrutiny, accounting firms are uniquely positioned to provide clarity, structure, and forward-looking guidance. By emphasizing education, integrating CAMT and international considerations into recurring workflows, and expanding advisory capabilities in energy and cross-border planning, firms can help clients navigate 2026 with greater confidence and accuracy.

Tools that help

When guidance evolves mid-cycle, having a research workspace that summarizes rules, traces sources, and supports scenario analysis speeds decisions and documentation. CCH^® AnswerConnect can assist with AI-guided summaries, Smart Charts, and memo-ready source linking for elections, CAMT diagnostics, and §250/energy workflows.