The passage of the One Big Beautiful Bill Act earlier this year has opened the door to several new tax-saving strategies for businesses. While the legislation is complex, its provisions—when paired with smart planning—can lead to meaningful financial benefits. Tax planning should be a year-round activity, but here are some highlights to consider as we approach year-end:
💼 Bonus Depreciation Returns
Businesses can now deduct 100% of the cost of most personal property acquired in 2025. If you’re planning capital expenditures through early 2026, it may be wise to accelerate purchases into this year to take full advantage of the deduction. This applies to equipment, machinery, and other qualifying assets.
👵 Seniors’ Deduction
Business owners over 65 may benefit from Seniors’ deduction. If your adjusted gross income is below $150,000, you may qualify for an additional $6,000 deduction per eligible senior from 2025 through 2028. This incentive pairs well with bonus depreciation and may make asset purchases even more financially attractive.
🔬 R&D Credit
While the R&D credit isn’t new, recent changes make it worth revisiting. Businesses—especially innovative businesses outside traditional tech sectors—should take a fresh look to determine eligibility and assess how current expensing rules may enhance the R&D benefit. The Act reinstates the ability to expense domestic R&D costs immediately, rather than amortizing them over 15 years. If you had R&D expenses from 2021–2024, you may be able to write off the remaining balance in 2025 or split it across 2025 and 2026. Note: international R&D expenses still require amortization over 15 years.
🏭 New Incentives for Manufacturers
Manufacturers stand to gain from the new Qualified Production Property (QPP) provision. If you build or substantially improve a production facility, the cost may be fully expensed. However, there’s a catch: if the property’s use changes within 10 years (e.g., converting manufacturing space into offices), the previously expensed costs must be recaptured as ordinary income. This is not just for computer chip manufacturers – it applies to all manufacturers.
💰 Tip Income Exclusion Expanded
The IRS recently released a list of professions eligible for tip income exclusion, and it includes some unexpected professions. The included professions include digital content creators, event planners, self-enrichment instructors, and pet caretakers—alongside traditional roles like waitstaff and hairdressers. Married couples with AGI under $300,000 may exclude up to $25,000 in tips from taxable income.
🧾 Preparing for a Business Exit
If you’re considering selling your business in the coming year, now is the time to review your depreciation schedule. Remove any assets that are no longer in use or have been disposed. Cleaning up your schedule can help reduce depreciation recapture, which is taxed as ordinary income during an asset sale.
📉 Capital Loss Harvesting for Future Business Exit
If you’re planning to exit your business in the coming years, you should consider strategically harvesting capital losses from your investment accounts now. These losses can offset capital gains and reduce taxable income—up to $3,000 annually—with any excess loss carried forward to future years. Accumulating these losses in advance can be especially valuable in the year you sell your business, helping to minimize the tax impact of the disposition.
🏡 State and Local Tax Deduction (SALT)
The itemized deduction cap for state and local taxes (SALT) has increased to $40,000 per household, with phase-out beginning at a modified adjusted gross income (MAGI) of $500,000. This presents a strategic opportunity for taxpayers who don’t normally itemize annually. By bunching deductible expenses—such as property taxes—into one year, they may exceed the standard deduction threshold and benefit from itemizing. In alternating years, they can revert to the standard deduction. Note: the SALT cap is scheduled to return to $10,000 in 2030.
🪪 Estate and Gift Tax Exemption
Starting in 2026, the individual estate and gift tax exemption will be permanently raised to $15 million ($30 million for married couples). While not an income tax item, it’s a good reminder to include your estate attorney in year-end planning to ensure your documents reflect your current wishes. The increase and permanency in the higher exemption amount should be helpful in establishing a lasting estate plan.
These changes offer a range of opportunities—but also come with nuances that require careful planning. Be sure to consult your tax professional in the coming months to tailor these strategies – and others – to your specific situation before the end of the year.
About the Author
Jeff Redd is a tax partner with Lawrence J Beardsley CPA, PLLC and is committed to helping demystify the Internal Revenue Code and providing clear, actionable tax guidance to his clients. With over 30 years of experience in the field, Jeff directs the tax practice, overseeing a broad range of services including income tax compliance, planning, audits, and collections issues. Our purpose at LJB CPAs is to enhance lives by fostering the growth and success of conscious enterprises. His email is jeff@ljbcpa.com and phone number is 817-469-6800.
