As businesses prepare for 2027, tax planning remains a critical part of long-term financial strategy. While recent legislative changes have brought greater certainty to the tax landscape, opportunities and challenges still exist. Kurt Beck, a certified public accountant and partner at Plante Moran in East Lansing for more than 35 years, shared insights on key tax code updates, overlooked incentives and planning strategies that can help businesses make informed decisions in the year ahead.
Are there any new updates on tax codes businesses should be aware of as we head into 2027?
We’re entering a period of greater tax certainty compared to the recent past, when many provisions were set to expire. That stability gives business owners more confidence to plan strategically.
Key areas to watch include depreciation and interest deductibility. Current rules allow for highly favorable treatment of capital expenditures, often enabling businesses to deduct a significant portion — sometimes 100% — of qualifying equipment and technology investments.
In addition, recent changes are expected to ease prior limitations on interest expense deductions. Businesses should also be mindful that Michigan does not fully conform to federal depreciation rules, which can create important differences at the state level.
Are there any tax credits, incentives or deductions that remain underutilized by Michigan businesses?
One of the most overlooked opportunities is the Michigan flow-through entity tax election. This allows certain businesses to pay state taxes at the entity level rather than the individual owner level, unlocking deductions that might otherwise be limited. We still see many eligible businesses not taking advantage of this.
Additionally, cost segregation studies remain underutilized; they can accelerate depreciation on building components and generate significant first-year tax benefits.
Finally, research and development tax credits — both federal and now available in Michigan — are often missed or underclaimed, even by companies already engaged in qualifying activities.
What types of businesses should be paying especially close attention to tax policy changes heading into 2027?
Flow-through entities, such as partnerships and S corporations, should remain particularly attentive, as changes to tax rates or deductions could materially impact owners. Manufacturers and service-based businesses should also monitor state-level policy changes, especially those related to depreciation, as Michigan’s treatment differs from federal rules. While corporate tax rates for C corporations are currently stable, any future policy shifts could affect entity choice decisions.
What tax planning strategies should business owners be considering now to prepare for 2027 and beyond?
Proactive planning around capital investments is critical, particularly given the favorable depreciation environment. Businesses should also evaluate whether they are fully capturing available R&D credits tied to innovation, including software development.
Perhaps most importantly, now is a good time to revisit entity structure — whether operating as a C corporation, S corporation or partnership — to ensure it aligns with long-term tax efficiency goals.
Jason Schmitt
Jason Schmitt is a social media manager for M3 Group. Originally from St. Johns, he spent more than 20 years in the field of journalism, working for several newspapers across the state. He and his wife, Sue, currently reside in Royal Oak and enjoy golf, pickleball, bowling and traveling to warm destinations.
