Federal Tax Update: What US Business Owners Need to Know
What changed this week
| Development | Who it affects |
|---|---|
| Beneficial Ownership Reporting Rule Finalized | Owners of corporations, LLCs, and similar entities formed or registered in the US, especially small and mid-size businesses that have not filed or updated a beneficial ownership report recently. |
| R&D Cost Accounting Rules Get an Automatic Update Option | Business owners whose companies incur research and experimental costs — software developers, manufacturers, product designers, engineering firms, and similar companies doing qualifying R&D. |
| New Tariffs and Import Bans Hit Canadian Goods | Any business that imports goods from Canada — including auto parts, dairy, alcohol, furniture, metals, or other consumer goods — or exports to Canada and could face Canadian retaliatory tariffs. |
| IRS Clarifies Business Interest Expense Deduction Limits | Businesses that carry significant debt — including companies that borrowed to finance equipment, real estate, expansion, or working capital — and pay meaningful interest expense each year. |
| House Advances Digital Asset Tax Relief Bill | Businesses that accept digital assets as payment, hold cryptocurrency on their books, engage in mining or staking, or receive digital asset donations from customers. |
Beneficial Ownership Reporting Rule Finalized
Treasury finalized a new regulation, published under regulatory identifier RIN 1506-AB67, addressing beneficial ownership information (BOI) reporting under the Corporate Transparency Act (CTA). The CTA requires many corporations, limited liability companies, and similar entities formed or registered to do business in the United States to report information about the individuals who directly or indirectly own or control them to the Treasury’s Financial Crimes Enforcement Network (FinCEN). This final rule was released alongside a broader wave of Treasury and IRS guidance issued in August 2026 covering research costs, foreign-source income, retirement plans, and other business tax topics. Because BOI reporting obligations, exemptions, and deadlines have been revised more than once since the requirement first took effect, a rule you read about a year ago may no longer reflect what your business is required to file today. There is no plain-English summary in the source material of every change this particular rule makes, so business owners should confirm current requirements directly with FinCEN rather than relying on secondhand summaries, including this one, before deciding what — if anything — needs to be filed or updated.
Who it affects: Owners of corporations, LLCs, and similar entities formed or registered in the US, especially small and mid-size businesses that have not filed or updated a beneficial ownership report recently.
What to do
Go to FinCEN’s official beneficial ownership page to confirm your entity’s current filing requirement, exemptions, and deadline under this new final rule, and loop in your attorney or accountant before filing or skipping a filing.
Primary source: Federal Register – Beneficial Ownership Information Reporting Requirement Revision (FinCEN final rule, RIN 1506-AB67)
R&D Cost Accounting Rules Get an Automatic Update Option
The IRS issued Revenue Procedure 2026-32, updating the automatic consent procedures under Internal Revenue Code section 446 for businesses that want to change their tax accounting method for research and experimental (R&E) expenditures under sections 174 and 174A, and for certain long-term contracts under section 460. The new procedure reflects changes that the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) made to how R&E costs are treated for tax purposes, including the addition of new Code section 174A alongside existing section 174. Rev. Proc. 2026-32 updates the prior automatic-change procedures found in Rev. Proc. 2025-23. In practical terms, an automatic method change means a business can make an eligible change by filing the required form with its tax return, without waiting for the IRS to individually approve a formal, non-automatic request — a faster and cheaper path than the alternative. Because this is a procedural update rather than a plain-language summary of the underlying substantive tax change, business owners should not try to interpret it on their own; the value here is largely in what it lets your tax preparer do on your behalf.
Who it affects: Business owners whose companies incur research and experimental costs — software developers, manufacturers, product designers, engineering firms, and similar companies doing qualifying R&D.
What to do
Ask your tax preparer whether Rev. Proc. 2026-32 gives your business a faster, automatic way to update how it accounts for R&E costs under the current law, and whether that could improve your current-year or prior-year tax position.
Primary source: IRS Revenue Procedure 2026-32
New Tariffs and Import Bans Hit Canadian Goods
The US escalated its trade dispute with Canada on several fronts. Effective August 22, an additional 50 percent tariff took effect on a range of Canadian goods — including agricultural products, alcohol, cosmetics, chemicals, textiles, equipment, consumer goods, wood and paper products, and sports equipment — imposed under section 338 of the Tariff Act of 1930; goods that qualify as originating under the US-Mexico-Canada Agreement (USMCA) do not receive an exemption from this particular tariff. Canada responded with its own tariffs of 15, 25, and 50 percent on US steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, effective September 8. The US then announced new import bans on specific Canadian products, effective September 29 — including motorcycles and similar vehicles with engines larger than 800 cubic centimeters, certain whey protein and sugar products, and a range of beer, wine, and liquor — along with further additions to and removals from the 50 percent tariff list, effective September 15 (additions include certain cheeses, fats and oils, leather, boats, iron, steel, and aluminum items, golf carts, and furniture; removals include cement, fishing gear, certain sugars, salt, and paper products). Separately, tariffs on all cars, trucks, auto parts, and steel are set to rise to 50 percent starting January 1, 2027.
Who it affects: Any business that imports goods from Canada — including auto parts, dairy, alcohol, furniture, metals, or other consumer goods — or exports to Canada and could face Canadian retaliatory tariffs.
What to do
Check your product classifications against the current and newly added tariff and ban lists before the September 15 and September 29 effective dates, confirm whether your goods actually qualify for a USMCA exemption under this specific tariff action (many do not), and budget now for the 50 percent auto, auto-parts, and steel tariff scheduled for January 1, 2027.
Primary source: Federal Register – Excluding Certain Canadian Products From Importation (Motor Vehicles) · Federal Register – Modifying the Scope of Products of Canada Subject to Additional Duties (Motor Vehicles)
IRS Clarifies Business Interest Expense Deduction Limits
As part of the same wave of guidance implementing the One Big Beautiful Bill Act (OBBBA, P.L. 119-21), the IRS released Fact Sheet FS-2026-14 addressing the limitation on the deduction for business interest expense — the rule under Internal Revenue Code section 163(j) that caps how much interest expense a business can deduct each year based on a formula tied to its income. The fact sheet is meant to help businesses and their preparers apply the limitation correctly following the changes OBBBA made in this area. It was released alongside related items covering opportunity funds, R&E accounting methods, and the allocation of deductions to foreign-source income, all part of a larger guidance package Treasury and the IRS issued during the August congressional recess. The source material does not spell out the specific new numbers or formula changes in the fact sheet itself, so business owners carrying significant debt should treat this as a signal to revisit the calculation with their preparer rather than a do-it-yourself update — getting the section 163(j) limitation wrong can mean losing a deduction you are otherwise entitled to, or claiming one you are not.
Who it affects: Businesses that carry significant debt — including companies that borrowed to finance equipment, real estate, expansion, or working capital — and pay meaningful interest expense each year.
What to do
Have your tax preparer review IRS Fact Sheet FS-2026-14 to confirm whether OBBBA’s changes to the section 163(j) interest expense limitation affect how much interest your business can deduct this year, especially if you were close to the cap under the prior rules.
Primary source: IRS – Questions and Answers About the Limitation on the Deduction for Business Interest Expense (FS-2026-14)
House Advances Digital Asset Tax Relief Bill
The House Ways and Means Committee voted 38-5 on September 16 to advance the Digital Asset Tax Certainty Act (H.R. 10357) to the full House — it is a proposed bill, not yet law. As written, it would exempt taxpayers from recognizing gain or loss when using digital assets to pay qualifying network or transaction fees of $10 or less, and would exempt those small transactions from Form 1099-DA broker reporting. It would clarify that mining and staking income is taxed based on its character without changing when that income must be recognized. It would add widely traded digital assets and qualified US dollar stablecoins to the list of property types exempt from costly qualified-appraisal requirements when donated to charity, while requiring donated digital assets to be converted to cash before a donor can claim a charitable deduction. The bill would also direct Treasury to establish, within one year, a voluntary disclosure program letting taxpayers who under-reported past digital asset transactions come forward on more favorable terms, provided they file amended returns within 24 months of the program’s start. Separately, it would restore the ability to deduct wagering losses up to the full amount of wagering gains, reversing a stricter limit enacted in 2025. The bill next goes to the full House, with floor action unlikely before the post-midterm lame-duck session.
Who it affects: Businesses that accept digital assets as payment, hold cryptocurrency on their books, engage in mining or staking, or receive digital asset donations from customers.
What to do
If your business transacts in digital assets, start tracking small transaction fees separately now so you are ready to apply the proposed $10 de minimis exemption if it becomes law, and hold off on changing how you report past digital asset activity until you see whether the voluntary disclosure program actually gets created.
Primary source: Congress.gov – H.R. 10357, Digital Asset Tax Certainty Act (bill text)
What this means for your business
- A new final rule on beneficial ownership reporting just came out — do not assume your Corporate Transparency Act filing obligations from a year ago are still accurate; check FinCEN’s current requirements before year-end.
- If your business spends money on research, product development, or engineering, ask your tax preparer whether the IRS’s updated accounting-method procedures (Rev. Proc. 2026-32) open up a beneficial election you have not made yet.
- Businesses that import from Canada face a fast-moving tariff and ban list — products can be added or removed with only two weeks’ notice, so check your product codes regularly rather than once a year.
- Debt-financed businesses should revisit their business interest expense deduction calculation now that the IRS has issued fact-sheet guidance on how the section 163(j) limitation applies under the new law.
- The digital asset tax relief described above is a bill, not a law — it is smart to prepare for it, but do not change how you report cryptocurrency transactions based on legislation that has only cleared one House committee.
Five federal tax moves business owners should not ignore this week
The IRS eased the process for updating R&D cost accounting, Treasury finalized a new beneficial-ownership reporting rule, fresh tariffs and import bans hit Canadian goods across several industries, the IRS clarified how the business interest expense limit applies, and a House committee advanced a bill that would simplify digital asset taxes.
Frequently asked questions
Q. Is the Corporate Transparency Act beneficial ownership reporting requirement still in effect?
Treasury has continued to issue and revise rules in this area, most recently a final rule addressing beneficial ownership information reporting. Requirements, exemptions, and deadlines have changed more than once since the law took effect, so business owners should check FinCEN’s current guidance directly rather than rely on something they read a year ago, and talk to their attorney or accountant about their specific entity.
Q. Do the new Canada tariffs affect goods that already qualify for USMCA treatment?
Not automatically. For this particular round of tariffs, goods that qualify as originating under the US-Mexico-Canada Agreement do not receive an exemption, which differs from how some earlier tariff actions have treated USMCA-qualifying goods. Businesses need to check the specific tariff action that applies to their products rather than assume USMCA coverage applies across the board.
Q. Has the digital asset tax bill described here become law?
No. As of this week, the Digital Asset Tax Certainty Act has only passed a House committee vote and still needs full House passage, Senate action, and the president’s signature before it takes effect. Business owners can use the current version to plan ahead, but they should not change their tax reporting based on a bill that has not passed yet.
