The world of tax law is constantly evolving, and the latest legislation—the One Big Beautiful Bill Act (OBBBA)—brings some of the most impactful changes in recent years.
Whether you’re a sole proprietor, a partner in a flow-through entity, or running a large corporation, these changes directly affect how you calculate and manage your tax obligation.
For individuals and business owners alike, staying ahead of these updates isn’t just a matter of compliance, it’s about making smart, strategic decisions that can save you money and position your finances for long-term stability.
Now, more than ever, it’s critical to review your tax strategy and understand how new rules may reshape your bottom line.
SALT Deduction Increase: A Shift That Requires Planning
Perhaps one of the most attention-grabbing changes under the OBBBA is the significant expansion of the State and Local Tax (SALT) deduction, which is available to those who itemize their deductions on personal tax returns.
Previously capped at $10,000, the deduction limit has now been raised to $40,000 through 2029. On the surface, this seems like an enormous win for taxpayers, especially those in high-tax states.
But the story doesn’t end there. The bill also affirms that flow-through businesses—such as sole proprietorships, partnerships, and S-corporations—can pay their tax directly on a state tax return. This is known as the pass-through entity tax, or PTET.
It’s important to reassess how this change affects your business’s taxable income. With the SALT increase, you may want to reconsider whether paying your business taxes directly to a state using the PTET process is the best approach.
For some, the higher SALT deduction paired with PTET elections may provide significant benefits. For others, it may not be worth the shift. The key takeaway is that planning is essential. Ignoring these changes could mean leaving money on the table.
QBI Deduction Made Permanent: Rare Tax Certainty
Another notable change in the OBBBA is the permanence of the Qualified Business Income (QBI) deduction. For years, business owners have been watching Congress renew this provision in temporary spurts, leaving uncertainty about its future.
When you combine this with the unchanged 21% tax rate for C corporations, the landscape becomes clearer. Businesses finally have a measure of tax stability, which is a rare occurrence in the ever-shifting tax code.
This newfound certainty creates an opportunity to step back and reassess your entity structure. Are you better off as a sole proprietor, partnership, or S-corporation?
Or would converting to a C corporation provide advantages under the new rules? For many business owners, now is the time to analyze entity choice, not later.
Expense Options For Capital Purchases: Timing Is Everything
Another continuing provision in the OBBBA is the ability to take full advantage of 100% bonus depreciation and enhanced Section 179 expensing for capital purchases.
For businesses investing in equipment, vehicles, or other major assets, these options provide a powerful way to manage your tax obligation in the near term.
However, it’s important to remember that these two expensing options only change the timing of the amount you can write off, not the overall total amount you can write off.
Accelerating depreciation can provide valuable tax relief now, but it may leave you with fewer deductions in future years. This is where planning becomes critical.
If your business anticipates growth or higher income in coming years, spreading out deductions might be the smarter move. On the other hand, if immediate cash flow is your priority, maximizing depreciation today could be the right choice.
What These Changes Mean For Business Owners
Put simply: the tax landscape is more complex, and more full of opportunity, than ever before. The SALT deduction expansion, PTET confirmation, QBI permanence, and expensing options all intersect in ways that can significantly influence your business’s tax profile.
For individuals, especially those who own flow-through businesses, these changes may impact not just business returns but personal tax filings as well. That’s why reviewing your overall tax obligation is so critical. The decisions you make today can shape your financial reality for years to come.
Here are a few questions to ask yourself:
- How does the expanded SALT deduction affect my personal or business return?
- Should I reconsider my business’s entity structure now that the QBI deduction is permanent?
- Does accelerating depreciation make sense for my business’s long-term growth strategy?
- Am I aligning my tax decisions with both state and federal opportunities?
If you’re unsure of the answers, you’re not alone. These rules are complex, and while they create opportunities, they also introduce risks if not navigated correctly.
Tax Planning With Minton CPA & Associates
At Minton CPA & Associates, we know that navigating today’s tax code is no small task. The OBBBA has introduced changes that will impact both individuals and business owners for years to come, making it more important than ever to review your tax obligation with a clear strategy.
We specialize in tax planning and preparation services designed to help you make the most of the opportunities in front of you while avoiding costly missteps. Our team works with clients to assess their unique situation, model potential outcomes, and implement strategies that align with both immediate needs and long-term goals.
Don’t leave your financial future up to chance. Call us today at 757-546-2870 to schedule a consultation and learn how proactive planning can put you in control of your tax obligations.