Big Tax Savings Are Back: What the OBBBA Means for You
The new One Big Beautiful Bill Act (OBBBA) is a game-changer for small business owners. It restores and even expands some of the most valuable tax deductions available—helping you write off more of your investments, faster.
Here’s what you need to know in plain English:
1. 100% Bonus Depreciation Is Back—And Permanent
If you buy qualifying business property after January 20, 2025, you can immediately deduct the full cost—100% in the first year.
In the past, bonus depreciation was temporary and gradually shrinking (80% in 2023, 60% in 2024, and 40% in early 2025). But under OBBBA, it’s back to 100% permanently.
What qualifies?
- Business equipment
- Computers and software (off-the-shelf)
- Furniture, fixtures, and machinery
- Land improvements (like driveways, fences, and landscaping)
- Certain commercial building upgrades (like new interior improvements)
What doesn’t qualify?
- Land itself
- Buildings or permanent structures
- Inventory for resale
- Intangible assets like patents and trademarks
Tip: If you run a rental or commercial property business, a cost segregation study could let you carve out parts of your property (like fixtures or land improvements) that qualify for immediate write-offs.
2. Section 179 Expensing—Now Bigger Than Ever
Starting in 2025, the deduction limit for Section 179 expensing jumps to $2.5 million (up from $1.22 million in 2024). That means more of your purchases can be fully deducted upfront.
The catch: Section 179 has limits based on your income and total purchases, and it requires you to actively elect it on your tax return. For most businesses, bonus depreciation will now be the simpler and more powerful option.
3. A New 100% Deduction for Manufacturers
This one’s huge for production businesses: if you build or buy qualifying production facilities between 2025 and 2028 (and put them into service by 2030), you may be able to deduct the entire cost in year one.
That means no more waiting 39 years to depreciate a factory—you can write it off right away.
But—this deduction is temporary. If you’re planning new construction, the clock is ticking.
What This Means for You
- Faster write-offs = lower taxes. You can invest in your business and recover costs immediately.
- Bigger limits. Section 179 gives more flexibility, but bonus depreciation now covers nearly everything without caps.
- Special wins for manufacturers and property owners. Factories and rental properties see some of the biggest benefits.
Please reach out to us if you have questions about deductions under the OBBBA and how to save money in your upcoming tax year.