Tax law rarely moves fast, and when it does, most of what gets written about it is either too technical to use or too vague to matter. Understanding key One Big Beautiful Bill tax law updates gives business owners and investors a huge advantage when preparing for year-end. Here is a short rundown of the major changes enacted under the law and what they actually mean for your bottom line. For the full picture, you can also watch this One Big Beautiful Bill video playlist.
Bonus Depreciation Is Back, and This Time It’s Permanent
Bonus depreciation is back at 100%, and this time it’s permanent rather than scheduled to phase out again. Anything placed in service after January 19, 2025 qualifies for a full write-off in the year you buy it, instead of spreading that deduction out over five or seven years.
A veterinary practice buying $350,000 of equipment, for example, can now deduct the full amount immediately rather than waiting years to recover it. That’s real cash back in the business in year one, not a slow trickle over half a decade.
There’s also a new provision for qualified production property, which lets manufacturers and other production-focused businesses fully depreciate the portion of a building actually used for production, something that was never available for real estate before. As always, check your state. Not every state conforms to federal bonus depreciation rules, so the benefit can look very different depending on where you file.
The R&D Tax Credit No Longer Forces You to Wait
The R&D tax credit also got a meaningful fix. For a few years, businesses claiming this credit were forced to amortize their research costs, spreading the deduction out over multiple years instead of taking it up front. That rule is gone.
Businesses can now fully deduct R&D payroll, contractor costs, and development expenses in the year they’re incurred, on top of the credit itself. This matters most for companies doing real, custom engineering and development work, even if it doesn’t look like a traditional lab.
A custom manufacturer we worked with is a good example. By documenting the design and engineering work already built into how they operate, they generated over $125,000 in net federal R&D credits over three years, without spending a dollar more than they already were.
Trump Accounts: A New Savings Vehicle for Kids
Trump accounts are the new savings vehicle everyone’s asking about. Every child born in 2025 through 2028 gets a $1,000 seed contribution from the federal government, and any child under 18 can have an account funded up to $5,000 a year by parents, grandparents, or an employer, with no earned income required. You can find the official details on the U.S. Treasury Trump Accounts website.
The money goes in after-tax, grows tax-deferred, and converts to a traditional IRA when the child turns 18. From there, a staggered Roth conversion can turn that account into tax-free money down the road, though the kiddie tax rules can complicate things if the child is still a dependent, so timing matters.
Funding opened July 4th, and setting one up starts with filing Form 4547. It’s worth doing sooner rather than later, since the money can’t start growing until the account is actually open and funded.
Opportunity Zones Get a Permanent Second Act
Opportunity Zones got a permanent second act. The program isn’t new, but this bill extends it indefinitely and adds real upside for rural zones specifically.
The core mechanic hasn’t changed: sell an asset, defer the gain, invest it in a qualifying zone, and if you hold that investment long enough, the appreciation on the new investment can come out completely tax-free. New zone designations are expected to roll out in the coming months, so it’s worth checking whether an area you already know has been designated before assuming you need to look somewhere unfamiliar.
A Few Other Changes Worth Knowing
A few other pieces are worth knowing about even if they don’t make headlines:
- SALT Deduction Cap: The SALT deduction cap increased, giving many taxpayers more room to deduct state and local taxes than they had under the prior rules.
- Excess Business Loss Limitations: The excess business loss limitation, which caps how much active business loss you can deduct in a single year, is now permanent. That matters more than it used to, given that bonus depreciation can generate a very large paper loss from a single equipment purchase. Our guide to maximizing the tax benefits of business losses explains how to plan around it.
The Bottom Line
None of this does you much good in the abstract. The real value is in matching these provisions to your specific situation before year-end, not after your return is already filed. Our year-end tax planning strategies are a good place to start.
Ready to Put the New Tax Rules to Work?
If you want help figuring out which of these apply to you, book a call with the Oro Tax Advisors team. We’ll walk through your situation and put a plan together.
This article is for educational purposes only and does not constitute legal or tax advice. Consult a qualified tax professional before implementing any strategy.