The One Big Beautiful Bill (OBBBA), passed for 2025, brought several important changes for businesses. If you own a business or are planning investments, it’s worth understanding what these updates mean for taxes, deductions, and planning strategies. Here’s a breakdown in plain English.
1. Continued Qualified Business Income (QBI) Deduction
The 20% deduction for Qualified Business Income (QBI) is here to stay. This deduction allows owners of pass-through businesses—like sole proprietorships, partnerships, S-corporations, and some LLCs to deduct up to 20% of their qualified business income from federal taxes. It’s a major incentive for small and medium-sized business owners, helping reduce taxable income and improve cash flow.
2. Immediate Deduction for Research & Experimental Expenditures
OBBBA restores the ability to fully deduct research or experimental expenses in the year they are incurred. Previously, businesses often had to capitalize these costs and depreciate them over time, which delayed tax benefits. Now, qualifying R&D expenses can be deducted immediately, making innovation more financially attractive for companies investing in new products or processes.
3. Permanent 100% Bonus Depreciation
One of the biggest changes is that 100% bonus depreciation is now permanent for qualifying property acquired and placed in service. This means businesses can immediately deduct the full cost of eligible assets (like equipment, machinery, or furniture) in the year they start using them. This accelerates tax savings and helps businesses reinvest cash into operations or expansion.
4. Renewal and Adjustment of Qualified Opportunity Zones
The bill renews the Qualified Opportunity Zone (QOZ) program but updates the eligibility rules. Businesses investing in designated opportunity zones can still defer or reduce capital gains taxes if they reinvest profits in these areas, but they need to be aware of the adjusted requirements to maximize benefits.
5. Permanent Limitations on Excess Business Losses
OBBBA makes the limitations on excess business losses indefinite. Previously, some losses above a certain threshold could offset other income in a given year, but limits were temporary. Now, businesses will continue to face restrictions on how much loss can be used to offset non-business income, ensuring that large losses don’t create disproportionate tax advantages.
What This Means for Your Business
The 2025 tax changes under OBBBA offer several opportunities to reduce taxable income, invest strategically, and improve cash flow. Remember this:
- If you own a pass-through business, the QBI deduction remains a valuable benefit.
- Innovation is encouraged with immediate R&D deductions.
- Buying qualifying property? 100% bonus depreciation means you can write off the cost right away.
- Opportunity Zone investments are still advantageous but require careful planning.
- Track your business losses carefully, as limitations are now permanent.
Set Up Your Business’s Finances With a Pro
Working with a CPA or tax advisor is more important than ever to make sure your business leverages these rules effectively while staying compliant. Proper planning can maximize deductions and position your company for growth in 2025 and beyond.
But not all CPAs are created equal. Here at 13 Consulting, we go above and beyond for every single client, every single time. No matter the business size, we’re prepared to treat your business like our own. Maximizing deductions and planning strategically.
Ready to get your business’s finances set up the right way? Schedule a call with 13 Consulting for expert advice.
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