Hi,
Most business owners are going to leave thousands on the table this year because a majority of the OBBBA changes are meant to help businesses, and hardly anyone even knows what they are!
Year-end is when this actually matters, since several of these depend on decisions made before December 31.
You don’t need a complicated setup. If any of these apply to your business, there’s a good chance it’s worth a look:
- You buy equipment, vehicles, or machinery for the business
- You invest in manufacturing or production property
- You pay for software development, product testing, or engineering work
- You run a pass-through entity (LLC, S-corp, or partnership)
- You carry business debt with meaningful interest payments
- You pay contractors or vendors who receive 1099s
Here’s how the savings work:
- 100% bonus depreciation is back, and it’s permanent for property placed in service on or after January 19, 2025, so equipment and machinery can be written off in full in year one instead of spread over several years. Qualified manufacturing property now qualifies too, for the first time
- Section 179 expensing jumped to a $2.5 million cap, phasing out once qualifying property purchases exceed $4 million
- Domestic R&D costs can be expensed immediately again instead of capitalized and amortized over several years, and if your business averages $31 million or less in gross receipts, you can go back and apply this retroactively to 2022 through 2024
- The QBI deduction (20% off qualifying pass-through income) was made permanent, with expanded thresholds that let more service-based businesses qualify than before
- Business interest deductions got more generous: the limit reverts to an EBITDA-based calculation, adding depreciation and amortization back in, instead of the more restrictive EBIT-based rule
- The 1099 reporting threshold rises from $600 to $2,000 starting in 2026, so fewer contractor and vendor payments will require a form at all
The catch is that most of these need to be acted on before year-end to count for this tax year, a bonus depreciation or Section 179 purchase has to actually be placed in service, and the retroactive R&D claim for 2022 through 2024 is only available for a limited window.
That’s not something to sort out in April, it’s something to plan for now, alongside anything else your business may already qualify for and isn’t claiming.
Reply to this email by Friday and we’ll set up a free 15 minute call with our senior tax advisor to go over exactly which of these apply to your business and what needs to happen before year-end to capture them.
Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax
www.dimovtax.com
