ARTICLE | September 23, 2025
Authored by FMF&E
Executive Summary
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, permanently extends many individual and business provisions of the 2017 Tax Cuts and Jobs Act (TCJA) while introducing new deductions, phasing out several clean-energy incentives, and making targeted changes to international, estate, and charitable tax rules. With many provisions effective in 2025 and some retroactive opportunities available, taxpayers have a narrow window to update strategies and optimize 2025 tax planning.
Key Individual Provisions
- Permanent TCJA Extensions – Top individual rate bracket remains the same, higher standard deduction, increased child tax credit, and larger estate-tax exemption ($15 million per individual) are now permanent.
- SALT Deduction Increase – Cap rises to $40,000 ($20,000 MFS) from 2025-2029, indexed for inflation, then reverts to $10,000. Phase-down begins once AGI exceeds $500,000.
- Above-the-Line Deductions (2025-2028) – Up to $25,000 of tip income and $12,500 of overtime pay (double for MFJ) may be deducted; interest on new U.S.-assembled vehicle loans may be deductible (subject to certain limitations).
- Charitable Contributions - Change for 2026 – Non-itemizers may deduct up to $1,000 ($2,000 MFJ); itemizers face a 0.5 percent AGI floor. Corporations face a new 1 percent taxable-income floor.
- Trump Accounts for Minors – New tax-favored savings vehicle for children born 2025-2028.
Key Business Provisions
- Section 199A Made Permanent – 20 percent qualified business income deduction preserved; phase-in thresholds expanded.
- 100 Percent Bonus Depreciation – Restored on qualifying property placed in service after January 19, 2025; new 100 percent expensing for qualified manufacturing buildings (service before 2031).
- Section 174 R&D Costs – Domestic research costs may again be expensed immediately; retroactive acceleration permitted for certain costs capitalized 2022-2024.
- Interest Deduction Limit – Returns to “EBITDA”-based calculation starting 2025.
- Enhanced Section 1202 QSBS – Tiered exclusions (50 / 75 / 100 percent for 3 / 4 / 5-year holding); issuer asset ceiling increased to $75 million; per-taxpayer cap increased to $15 million.
- International Changes – GILTI (renamed NCTI) and FDII (renamed FDDEI) deductions reduced; BEAT rate fixed at 10.5 percent; FTC deemed-paid credit rises to 90 percent.
- Sunset of Clean-Energy Credits – certain wind, solar, and EV projects face new phase-outs / limitations.
Next Steps
The Treasury has begun issuing regulations, but most headline provisions are effective January 1, 2025. Engage your tax advisor now regarding your business and individual tax position to capture OBBBA benefits, avoid surprises at filing time, and optimize your tax posture for years to come.
The FMF&E team is eager to learn about you and your business. We are a Central New York based certified public accounting firm serving nationwide clients since 1980. Our experienced and dedicated team provides audit, accounting, tax and consulting services to businesses throughout the United States. Our clients include many energy companies, financial institutions, construction and real estate developers, manufacturers, professional services, and wholesalers and distributors.
FMF&E is a team of over 85 highly skilled and motivated professionals. Our team members possess additional highly valued industry certifications such as Certified Valuation Analyst, Certified Fraud Examiner, Certified Credit Union Internal Auditor, NAFCU Certified Compliance Officer, and more. Our growth has come from applying a strong results-oriented approach to servicing our clients.
For more information on how FMF&E can assist you, please email info@fmfecpa.com.