By Nick Hopkins, CPA, CFP®
Partner, Director of Tax Services
Email Nick
Federal tax reform is no longer on the horizon—it’s here. With President Trump signing the “One Big Beautiful Bill” into law following House and Senate approval, business taxpayers should act now to revisit their 2025 tax strategies in light of sweeping new provisions.
Key Legislative Highlights for Businesses
The final version of the bill includes several pro-growth measures aimed at strengthening U.S. businesses. Notable provisions include:
- 100% Bonus Depreciation: Full expensing for qualifying property is back. This allows businesses to deduct the entire cost of eligible equipment and assets in the year they are purchased, rather than spreading the deduction over several years.
- Section 174 R&D Expensing: Businesses can again immediately deduct domestic research and experimental costs, reversing the amortization requirement. This change lowers the cost of innovation by making R&D investments more tax-efficient and improving cash flow for companies developing new products or processes.
- Interest Expense Deduction (Section 163(j)): A permanent return to the EBITDA-based limit gives taxpayers more flexibility in financing decisions. By calculating the deduction based on earnings before interest, taxes, depreciation, and amortization, this rule increases the amount of deductible interest for leveraged businesses.
- Section 179 Expansion: The expensing cap increases to $2.5 million, further empowering smaller businesses to invest in technology, equipment, and other qualifying assets. Section 179 allows businesses to immediately deduct the full purchase price of certain assets, helping them offset the cost of critical investments without waiting years for tax relief.
Strategic Considerations for Business Owners
With these provisions now law, the increased certainty allows for more effective and strategic tax planning.
- Be Proactive, Not Reactive: Don’t wait until Q4. With the bill now signed into law, we can begin modeling tax scenarios based on the provisions most relevant to your business.
- Use Tax Projections & Cash Flow Modeling: Plan purchases and restructuring with a view of year-end liabilities and future cash needs. The goal isn’t to minimize tax at all costs—it’s to make informed decisions with full financial context.
- Reevaluate R&D Investments: The immediate deductibility of R&D changes the return on innovation. Businesses should reassess development budgets, credit eligibility (including Form 6765), and long-term planning under the new rules.
- Maintain Documentation: With IRS audit activity still modest, ensure clear documentation for bonus depreciation, R&D credits, and interest deductions to avoid compliance issues and withstand scrutiny.
Don’t Wait for Certainty
With the bill now signed into law, businesses should evaluate how its provisions may influence upcoming decisions, particularly around equipment purchases, business sales, or structural changes. While year-end is traditionally a time for tax planning, assessing the implications early provides more flexibility and allows for thoughtful, strategic adjustments.
Need assistance? Call me at (317) 608-6699 or email me here. Let’s make this legislative cycle work for you.