As you may have heard, the newly passed “One Big Beautiful Bill” (OBBBA), signed into law on July 4, 2025, includes sweeping tax changes that will affect business owners and high-income households in a major way starting in 2026. I've reviewed the law and want to highlight the areas I found most relevant to my clients—especially those earning $250K+ and running successful businesses. Be sure to always consult your CPA or Tax advisor.
Below are the opportunities—and a few watch-outs—you should know about:
🔧 Big Wins for Business Owners
1. 100% Bonus Depreciation Is Back
The bill reinstates 100% bonus depreciation retroactive to January 19, 2025, and extends it through 2029 (KBKG). This is a big opportunity for businesses purchasing equipment, vehicles, or making improvements to property. It means you can deduct the full cost of qualifying assets immediately, boosting your bottom line.
2. Full Expensing of Domestic R&D Costs
Businesses will once again be able to fully deduct R&D expenses in the year they occur (Bipartisan Policy Center). If your company invests in product development or technology upgrades, this can significantly lower your taxable income.
3. SALT Deduction Cap Raised to $40K
For the next five years, the cap on state and local tax (SALT) deductions will increase from $10,000 to $40,000 (AP News). This is especially helpful for clients living in high-tax states like California, where you’ve likely been limited in your ability to deduct property and income taxes.
👨👩👧👦 Family and Income Relief
1. Child Tax Credit Increase
The Child Tax Credit increases from $2,000 to $2,200 per child, with expanded refundability for lower-income families (Washington Post). For most of my clients, this is a modest change—but every dollar counts in long-term planning.
2. Higher Standard Deduction Made Permanent
The higher standard deduction introduced under the 2017 TCJA becomes permanent: $31,500 for married filers, with temporary additional boosts through 2028 (House Ways & Means Committee).
3. No More Tax on Tips, Overtime, and Social Security
Federal taxes are eliminated on tip income (up to $25,000), overtime, and Social Security benefits (Investopedia). This may present planning opportunities for couples where one spouse works in hospitality or is transitioning into retirement.
🚨 A Word of Caution
While these tax cuts are designed to provide relief, they’re partially offset by deep cuts to federal social programs such as Medicaid, food assistance (SNAP), and clean-energy incentives (MarketWatch).
Additionally, some clean-energy tax credits are rolled back. If you’ve been planning to invest in solar, EVs, or other green upgrades, you’ll want to revisit those calculations.
Lastly, the projected cost of the bill is $3–5 trillion over the next decade, according to the Tax Foundation, which may impact interest rates and the broader investment landscape (Tax Foundation).
💡 What You Should Do Now
✅ Re-evaluate depreciation strategy if you plan to acquire assets in 2025 or 2026.
✅ Schedule a mid-year tax planning session to update your income projections and take full advantage of the new deductions.
✅ Consider bunching charitable contributions or timing deductions in light of the expanded SALT cap.
✅ Review your retirement income plan, especially if Social Security benefits are part of your strategy.
✅ Talk with your CPA about how these changes affect your 2025 return and 2026 estimated payments.
At BAS Financial, I focus on helping business owners plan proactively—not just to reduce taxes today, but to build long-term financial strength and clarity. If you want to ensure your plan aligns with the new rules, let’s talk.
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Let’s make sure your plan works with the tax law—not against it.
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Material discussed is meant for general informational purposes only. The information should be relied upon only when coordinated with individual professional advice. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.