Business tax planning is entering a new era with the passage of the OBBBA. For tax professionals, these updates mean more than just new rules. They mean new opportunities and responsibilities when advising clients. Business owners, too, should be aware of the impact, but it’s tax professionals like you who will guide them through the changes.
Here are the top three OBBBA provisions you need to understand as you prepare for the upcoming filing seasons.
1. Permanent 100% Bonus Depreciation & Qualified Production Property
What changed:
OBBBA permanently restores 100% bonus depreciation for qualified property placed in service on or after January 19, 2025. It also creates a temporary new category for “Qualified Production Property” (QPP), offering additional first-year write-offs for manufacturing, agricultural, and chemical industries, provided strict deadlines are met.
It also introduces a new temporary bonus depreciation option for “qualified production property” (nonresidential real property used in manufacturing, production, or refining) under certain conditions (e.g. construction must begin between Jan. 20, 2025 and before 2029, placed in service by Jan. 1, 2031).
Why it matters:
1. You’ll need to carefully review contract and service dates to ensure assets qualify.
2. State-level conformity may differ, creating additional layers of compliance for multi-state businesses.
3. Timing strategies around QPP projects could make or break client eligibility.
What to watch out for / plan:
- Binding written contract dates matter: property under contract before Jan. 20, 2025 may not be eligible for the full benefit.
- State-level conformity: some states may not match federal bonus depreciation or may tax differently. Consider state tax impact.
- Timing of “qualified production property” projects is critical. Ensure construction begins in the requisite window and is placed in service in time.
2. Expanded Section 179 Expensing & Enhanced Credits
What changed:
The maximum Section 179 expensing limit increases to $2.5 million, with a new phase-out threshold beginning at $4 million. At the same time, OBBBA enhances the employer-provided childcare credit, expands Qualified Small Business Stock (QSBS) exclusions, and makes Opportunity Zones permanent.
Why it matters:
1. Clients may be able to expense more equipment and vehicles immediately, but you’ll need to assess whether Section 179 or bonus depreciation yields the best outcome.
2. Enhanced credits (childcare, Opportunity Zones) provide planning opportunities for small and midsize businesses.
3. QSBS and OZ rules require strategic long-term advising, especially for clients in growth or investment phases.
What to watch out for / plan:
- Section 179 is limited by taxable income—if a business doesn't have enough income, the deduction might be constrained.
- Which property qualifies: some types of property may be excluded. Be sure what your client buys qualifies.
- The combined strategy: often it's best to use Section 179 first (on eligible properties your clients want to expense), then use bonus depreciation on what's left.
3. Reporting Thresholds & Compliance Updates
What changed:
Several compliance rules shift under OBBBA, including:
- 1099-MISC and 1099-NEC reporting threshold raised from $600 to $2,000, effective for payments made in 2026.
- 1099-K rules revert to pre-2021 levels, applying only when payments exceed $20,000 and more than 200 transactions.
- Numerous clean energy credits are repealed or restricted, with deadlines for usage by 2025–2027.
Why it matters:
· Client compliance risk decreases for casual transactions, but businesses must still keep meticulous records.
· Advising on energy credit phase-outs will require urgency—clients who planned to use these incentives may need to accelerate projects.
· Threshold changes simplify reporting in some areas but raise the stakes for professionals responsible for accurate filings.
Why This Matters
For business owners, these provisions open doors for bigger deductions and better cash flow. But for tax professionals, they represent both an opportunity and a challenge: advising clients on when to act, how to qualify, and what risks to avoid.
Learn More With Our Course
Want a deeper dive into OBBBA’s impact on businesses? Our 2025 OBBBA’s Impact on Businesses Course offers a complete breakdown of these provisions, including depreciation, credits, reporting thresholds, and compliance strategies. Equip yourself with the knowledge to guide your clients confidently through these sweeping tax reforms.
2025 OBBBA’s Impact on Businesses Course
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