The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4th, 2025—and like any massive piece of legislation, it comes with both opportunities and complications for business owners and individuals. At Holmes & Associates, we’re here to break it down into actionable steps, so you know what changes matter to you.
1. Big Wins for Business Owners
Permanent 100% Bonus Depreciation & R&D Expensing
Businesses can now permanently deduct 100% of qualifying equipment purchases and domestic R&D expenses in the year they’re placed in service. This eliminates a tax penalty and gives businesses confidence to invest.
Pro Tip: Consider pairing this with a cost segregation study if you own commercial real estate.
Section 179 Expensing and Interest Deduction Improvements
Small business-friendly provisions—like the expanded Section 179 expensing rules and the less restrictive TCJA interest deduction cap—are now permanent.
2. Entity Structure Still Matters
Pass-Through Deduction Permanently Extended
The 20% deduction for pass-through income (such as from S-Corps and partnerships) has been made permanent. While controversial for creating unequal treatment compared to C-Corps, it means now’s a good time to revisit your business entity structure and confirm it still aligns with your goals.
3. SALT Cap Raised—Temporarily
From 2025–2029, the SALT (State and Local Tax) deduction cap increases from $10,000 to $40,000 for households making under $500,000.
It reverts to $10,000 after 2029—so timing is everything if you're in a high-tax state like California.
4. Estate and Gift Tax Changes Ahead
In 2026, the estate and gift tax exemption will be set at $15 million (adjusted for inflation). Now is the time to review your estate plan, especially if you're close to that threshold or considering significant asset transfers in the coming years.
5. Time to Book a Mid-Year Strategy Session
With OBBBA now official and tax season in the rearview mirror, July is the perfect time to:
Adjust estimated tax payments
Review entity selection
Maximize deductions under the new rules
Begin 2026 planning with updated exemption thresholds in mind
Let’s talk about what these changes mean for your specific situation.
Book a complimentary consultation today at 562-495-3331 or visit us at Holmes & Associates.