The One Big Beautiful Bill Act (OBBBA) introduced in 2025 brings some of the most significant small business tax changes in recent years.
Two of the biggest wins for small businesses?
- 100% bonus depreciation is back — permanently.
- The Qualified Business Income (QBI) deduction is here to stay.
If you’re a small business owner, real estate investor, or self-employed professional, these updates can dramatically reduce your tax bill and improve your cash-flow planning for 2025 and beyond.
100% Bonus Depreciation Returns — Permanently
Before the OBBBA, the Tax Cuts and Jobs Act (TCJA) was phasing out bonus depreciation, reducing it from 80% in 2023 to 0% by 2027.
Now, the OBBBA permanently reinstates 100% bonus depreciation for qualified property placed in service after January 19, 2025.
Key Highlights:
- 100% immediate write-off for qualified property
- Applies to used property (if new to you)
- Section 179 limit raised to $2.5 million (phase-out $4 million)
- Qualified Production Property (QPP) under §168(n) also eligible through 2031.
Why This Matters
For small business owners, this means:
- Massive year-one deductions on equipment, vehicles, and improvements
- Potential to offset other income, including W-2 or investment income
- Increased cash flow for reinvestment or expansion
QBI Deduction Made Permanent
The QBI deduction (IRC §199A) — which allows eligible pass-through owners to deduct up to 20% of qualified business income — was set to expire in 2025.
The OBBBA makes it permanent, expanding thresholds and simplifying wage/property formulas.
Highlights:
- 20% QBI deduction is now permanent
- Expanded income phase-out: $150K joint / $75K single
- Simplified limitations for wages and property basis
- Real-estate rentals may qualify if operated as a trade or business
Why it's a big deal
- Reduces effective tax rate by up to 7 percentage points
- Helps pass-throughs (LLCs, S-corps, partnerships) retain more profit
- Creates long-term planning stability for business owners
Schedule Your 2025 Tax Strategy Session
At Morkel Financial & Tax, we help small business owners, real-estate investors, and professionals with stock-based compensation take advantage of the latest federal and Utah tax laws — including the new OBBBA opportunities.
Use our expertise to:
Model your depreciation schedule
Optimize your QBI deduction
Reduce taxable income and maximize cash flow
