What OBBBA Actually Changes for 2025 Returns
The One Big Beautiful Bill Act (OBBBA) passed in mid-2025 and is now the tax law framework you'll file under this filing season. Most of what you've read about it is either wildly optimistic or missing the substance. Here's what actually matters — and what we're doing about it for our clients.
The QBI deduction is permanent, and the limits changed
The 20% qualified business income deduction under Section 199A was scheduled to sunset after 2025. OBBBA made it permanent and, for many owners of pass-through businesses, more useful. The specified-service-trade-or-business (SSTB) phase-in thresholds moved up materially, which pulls a lot of consultants, attorneys, financial advisors, and yes, CPAs back into the deduction.
What we're doing about it: rerunning reasonable-compensation analysis for every S-corp client. When the QBI deduction is permanent, the trade-off between W-2 wages (payroll tax cost) and pass-through income (payroll tax free but reduces QBI base) is a real optimization problem, not a rule of thumb.
Bonus depreciation is back to 100%
The phase-down that would have brought 2025 bonus depreciation to 40% is gone. Assets placed in service during 2025 get 100% first-year bonus depreciation under the new rules — with some category changes for research-heavy businesses and short-life property.
What we're doing about it: every asset addition acquired mid-2025 through year-end is getting a fresh placed-in-service review. In some cases the original vendor invoice date isn't the placed-in-service date, and getting that right is worth real dollars.
The estate and gift exemption stays elevated
The $10 million (indexed) exemption that was set to fall in half after 2025 is now scheduled to stay at the higher level. This changes the urgency of certain gifting strategies but not the strategies themselves. If you started a SLAT, GRAT, or IDGT process in 2024 on the assumption you had to use it or lose it, you have breathing room — but the planning is still worth doing.
What we're doing about it: for every estate-plan client we advised to accelerate gifts in 2024, we're reviewing basis positioning. The permanent higher exemption means step-up-at-death remains an efficient tool, and the trade-off between lifetime gifting (locks in valuation, gives away basis step-up) and death-basis planning is worth revisiting.
What OBBBA didn't do
- SALT cap is essentially unchanged for most taxpayers. State pass-through entity elections remain the workhorse workaround.
- Section 174 R&E capitalization was partially rolled back for domestic research but not fully repealed. If you have foreign R&D, you're still capitalizing.
- Excess business loss limits (Sec. 461(l)) are still in place and, if anything, tightened.
What we're doing across our client base
We're rerunning three-year projections for every high-earner client with active business interests. In roughly a third of cases, the combination of restored bonus depreciation and permanent QBI meaningfully changes the entity-choice conclusion we reached in 2023. That's not a small thing to walk back — but it's better than filing under an outdated strategy for another five years.
If you're a client and you haven't heard from us yet about your 2025 projection, you will. If you're not a client and OBBBA has your existing CPA giving you "we'll figure it out" answers, that's a conversation worth having.
David Meyer, CPA is a Partner at Laléa & Black and leads the firm's tax strategy practice for HNW individuals, cross-border filers, and closely held businesses.