The Oklahoma Bar Journal May 2026

Americans who treat this bill as just another tax update may miss one of the strongest windows in years to align tax planning with actual growth.

depreciable assets may again produce an immediate deduction rather than a slower multiyear recovery. In plain English, the law rewards businesses that are will ing to invest now rather than defer capital spending. The effect on closely held companies can be significant. A construction company buying heavy equipment, a dental practice upgrading imaging technology, a logistics business replacing trailers or a production shop installing new machinery may all see a dramati cally different after-tax cost calculus under restored 100% depreciation. This is especially important in industries where equipment is financed because the tax deduc tion may arrive much faster than the economic wear and tear of the asset. Businesses that had delayed purchases during the prior phase down of bonus depreciation may now revisit expansion plans. major area of change. The IRS explains that for tax years begin ning after Dec. 31, 2024, the law amended Section 163(J) to add back depreciation, amortization and depletion when calculating adjusted taxable income. That INTEREST DEDUCTIBILITY Interest deductibility is another

distinguish between deductible and nondeductible vehicle costs.

says employers and other payors must report certain cash tips, the occupation of the tip recipient and qualified overtime compensation on information returns, though the U.S. Department of the Treasury and the IRS provided transition relief for tax year 2025. That means restaurants, salons, hospitality operators, entertainment venues and service businesses need to think not only about labor costs but also about payroll system readiness and data retention for accurate tip reporting requirements. The law also created a new deduction for car loan interest for tax years 2025 through 2028. According to the IRS, individ uals may deduct up to $10,000 of interest paid on a qualifying loan used to purchase a qualified vehi cle for personal use, with phase outs beginning above $100,000 of modified adjusted gross income for single filers and $200,000 for joint filers. Lease payments do not qualify. That makes this provision especially relevant to middle-income households decid ing whether to finance a vehicle, as well as auto dealers, lenders and tax advisers helping clients NEW DEDUCTION FOR CAR LOAN INTEREST

NEW CHANGES FOR FAMILIES There are increased adoption credit limits for 2026, partial refundability and changes that allow Native American tribal governments to make special needs determinations for adoption credit purposes. The U.S. Department of the Treasury and the IRS have also issued guidance on “Trump Accounts,” including a one-time $1,000 pilot contribution for certain eligible U.S. citizen children born from Jan. 1, 2025, through Dec. 31, 2028, with contributions generally not allowed before July 4, 2026. DEPRECIATION One of the most consequential provisions for small-business planning is the restoration of the 100% additional first-year depreci ation for certain qualified property acquired and placed in service after Jan. 19, 2025. IRS materials and guidance released in early 2026 confirm that the law reinstated full bonus depreciation and added a new qualified production property in the manufacturing context. For many owner-operated businesses, that means purchases of machin ery, equipment and certain other

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

16 | MAY 2026

THE OKLAHOMA BAR JOURNAL