07/08/2025
Significant tax law changes have been proposed for the 2025 tax year under "The One Big Beautiful Bill." These potential updates could permanently alter key deductions and expensing rules for businesses across the country.
Key proposed changes for businesses include:
1. Permanent 100% Bonus Depreciation: The proposal would make 100% bonus depreciation permanent, a significant change from the prior 40% rate.
2. Full R&D Expensing: Domestic Research & Experimental (R&E) expenditures could be fully expensed in the year they occur, eliminating the previous 5-year amortization requirement.
3. Increased Section 179 Limit: The expensing limit for Section 179 would increase to $2.5 million with a phase-out threshold of $4 million, up from the $1 million limit.
4. Permanent 20% Pass-Through Deduction (199A): The 20% deduction for flow-through entities would be made permanent.
5. Manufacturing Expensing: The bill introduces 100% expensing for certain manufacturing structures.
6. SALT Cap Increase: The State and Local Tax (SALT) deduction cap would be raised to $40,000 (from $10,000), phasing out for incomes above $500,000 for married couples.
These are just a few of the extensive changes proposed. Proactive planning and strategic advice are crucial to navigating this new landscape.
The team at Sterling CPAs is closely monitoring these developments. Contact us today to understand how these potential changes could impact your business's tax strategy for 2025 and beyond.
