While the One Big Beautiful Bill Act (OBBBA) has been enacted, several provisions remain subject to ongoing regulatory guidance, IRS interpretation, and technical clarification. As with other major tax legislation, implementation details will continue to evolve through Treasury regulations and administrative guidance over the coming months. Business owners should expect additional clarification around timing, eligibility, and coordination with existing TCJA provisions.
Near-Term Impact: Cash Flow and Planning Considerations
In the near term, OBBBA provides added flexibility for businesses navigating higher interest rates, tighter lending conditions, and rising operating costs. Key provisions include:
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Bonus depreciation adjustments
OBBBA provides permanent 100% bonus depreciation for eligible property acquired after January 19, 2025, subject to the applicable placed-in-service rules and available elections. Businesses should confirm eligibility, documentation, and election mechanics under current IRS guidance.Section 179 expensing expansion
The Act increases Section 179 expensing limits (up to $2.5 million for 2025, with a higher phase-out threshold), which may be especially impactful for closely held businesses investing in equipment, technology, and operational improvements.Temporary SALT cap adjustment
A temporary increase to the SALT deduction cap (up to $40,000 beginning in 2025) may provide relief for taxpayers in high-tax states, though the benefit is highly fact-specific and phases out at higher income levels. Modeling is essential to evaluate itemization strategy, entity-level approaches, and potential AMT sensitivity.
Long-Term Outlook: Planning with Caution and Clarity
Over the longer term, OBBBA signals a legislative intent to improve predictability for business planning—but several elements remain unsettled.
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The Act maintains the 21% corporate tax rate, which has remained permanent since the TCJA.
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It includes proposals related to extending or modifying the 20% Section 199A pass-through deduction, though permanence has not yet been enacted and remains subject to future legislative action.
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OBBBA also contains provisions affecting TCJA-era interest deduction and expensing rules, indicating a potential shift in how long-term investment and financing decisions may be evaluated once final guidance is issued.
Because many of these provisions rely on future interpretation or legislative follow-through, business owners should avoid making structural decisions based on assumptions alone.
What should I do now that OBBBA has passed?
With OBBBA enacted, the greatest risk is not missing a deduction—it’s reacting too late or planning based on incomplete information.
We recommend business owners take the following steps:
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Model entity-level tax impact
The continued 21% corporate rate, potential changes to Section 199A, and evolving expensing rules mean entity structures should be reviewed regularly. What made sense in prior years may no longer be optimal under today’s tax landscape. -
Plan capital investments intentionally
Accelerating purchases may unlock enhanced depreciation benefits—but only when aligned with cash flow, financing terms, and longer-term growth objectives. -
Review payroll and reporting systems
Increased scrutiny around tipped income, overtime, and wage classification makes payroll accuracy and documentation more critical than ever.
Work with a CPA Firm Focused on What’s Next
Federal tax legislation like OBBBA affects more than this year’s return: it shapes how you invest, grow, and structure your business for years to come. Badger CPA partners with business owners who want proactive tax planning, clear guidance through legislative change, and advisory support that scales with growth.
Whether you’re evaluating capital investments, reassessing your entity structure, or planning for 2026 and beyond, our team of experts is here to help. Get in touch with us to see how we can help.