From Policy to Planning: What the Latest One Big Beautiful Bill Changes Mean
Posted by Cheryl A. Jankowski on September 26, 2025
The OBBB introduces several changes to tax policy that impact both businesses and individuals. Here, we outline the key updates and planning strategies, as discussed during a panel discussion held on September 25, 2025, with experts from Lumsden McCormick and Bond, Schoeneck & King.
Key Changes Affecting Businesses
Depreciation Updates
- Section 179 Deduction: The limit is increased to $2.5 million, with a phaseout threshold raised to $4 million. These limits will adjust for inflation and apply to property placed in service after 12/31/24.
- Bonus Depreciation: 100% bonus depreciation is permanently reinstated for qualified property acquired and placed in service after 1/19/25. Previously, bonus depreciation was scheduled to phase out.
- Qualified Production Property (QPP): A new category for non-residential real property used in manufacturing, production, or refining, eligible for 100% bonus depreciation. This incentivizes investment and may attract outside capital or buyers.
Research & Experimental Expenditures (Section 174)
- Domestic R&E: Immediate expensing returns for U.S. costs after 2024, reversing mandatory capitalization rules from recent years.
- Foreign R&E: Mandatory capitalization and amortization over 15 years remain.
- Deduction Options: Both large and small businesses can expense unamortized costs from prior years, split deductions between 2025 and 2026, or continue amortization.
Qualified Business Income (QBI) Deduction
- The 20% QBI deduction is made permanent, with expanded phase-in ranges and a new minimum deduction for qualifying taxpayers. This benefits owners of pass-through entities and reduces tax burdens in asset sales.
Passthrough Entity Tax (PTET) Deduction
- PTET deduction remains available, despite changes to state and local tax itemized deductions.
Qualified Small Business Stock
- Gain exclusion for qualified stock is increased, with up to 100% exclusion for stock held five years and higher limits indexed to inflation.
Tip & Overtime Income Reporting
- New reporting requirements for employers and payors, with transition relief for 2025.
- Individuals in tipped industries can deduct up to $25,000 in qualified tips; similar deductions apply for overtime pay.
Key Changes Affecting Individuals
Tax Rates & Deductions
- Individual Tax Rates: TCJA rates are made permanent, with inflation adjustments to lower brackets.
- Standard Deduction: Increased and made permanent, with enhanced deductions for seniors.
- SALT Cap: Raised to $40,000, with annual increases and phaseouts for higher incomes.
Charitable Contributions
- New floors and limits for itemized and standard filers.
- Planning strategies include donor-advised funds, bunching contributions, and donating appreciated stock.
Mortgage Interest
- Limitations on mortgage acquisition debt are made permanent, with higher limits for new debt through 2029.
- Mortgage insurance premiums are now deductible.
Other Individual Provisions
- Casualty Losses: Expanded to include state-declared disasters.
- Wagering Losses: Deduction limited to 90% of losses and only to the extent of gains.
- Miscellaneous Deductions: Suspension made permanent, with exceptions for unreimbursed educator expenses.
Auto Loan Interest
- Deduction up to $10,000 for interest on new, U.S.-assembled vehicle loans, with phaseouts for higher incomes.
Education & Savings Accounts
- 529 accounts now cover K-12, homeschool, and credentialing expenses, with higher distribution limits.
- Introduction of “Trump Accounts” for children, seeded with $1,000 and classified as IRAs.
Estate Tax
- Exemption increased to $15 million ($30 million for couples), indexed for inflation.
- NY estate tax remains less favorable, with a “cliff” for estates exceeding the exemption by 5%.
Planning Opportunities
- Charitable Giving: Use donor-advised funds, bunching, and appreciated stock to maximize deductions and minimize capital gains.
- Estate Planning: Review portfolios and consider trusts to balance estate and income tax considerations.
- Business Investments: Take advantage of new depreciation rules and QPP incentives for asset-heavy businesses.
Contact the Experts
For more details or personalized planning, reach out to the presenters from Lumsden McCormick, including Robert Ingrasci, Cheryl Jankowski, and Kristin Re'.
The OBBB introduces significant changes for both businesses and individuals, with new opportunities for tax savings and strategic planning. Staying informed and working with trusted advisors is key to maximizing benefits and ensuring compliance.
Available OBBB Resources
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Cheryl has extensive experience working with business owners and individuals on minimizing taxes, with a focus on succession planning. With a thoughtful approach, Cheryl helps clients explore their long-term goals and plan accordingly. Leveraging Cheryl’s expertise in this area, the goal is to implement plans that achieve the wishes of the client and provide for tax-efficient transitions. Cheryl’s passion for working with corporations and individuals has allowed her to become a trusted business advisor. She has worked with clients not only in the Western New York region but also throughout the country. The breadth of this experience has allowed her to collaborate with other professional advisors to ensure that plans are flexible and innovative in the ever-changing world in which we live. Cheryl started her career with the Firm in 1991 and rejoined in 2019 adding additional strength to the tremendous talent of the Lumsden McCormick tax team.