The One Big Beautiful Bill Act (OBBBA) makes a number of changes impacting the business landscape. These changes will impact both small and large businesses. Here are some of the major changes and respective tips to consider.

SALT deduction increase requires planning

The tax deduction (commonly known as SALT) available to those who itemize their deductions on personal tax returns moves from $10,000 to $40,000 through 2029. The bill also confirms the ability for businesses that are flow-thru entities (businesses that pay their business tax on their personal tax return as a sole proprietor or through a K-1) to pay their tax directly on a state tax return (known as the pass-through entity tax, or PTET). This change now requires some planning.

Tip: You will need to review the impact of this change on your business’s taxable income. The SALT increase may change your decision to pay your business taxes directly to a state that is leveraging the PTET process.

QBI deduction is now permanent

The qualified business deduction is made permanent with the current legislation. When you combine this change with no change in the C corporation tax rate of 21%, businesses now have a rare dose of tax certainty.

Tip: With much of the uncertainty in business tax rates now resolved, now might be a good time to review your entity choice.

Continuation of expense options for capital purchases

100% bonus depreciation and expansive amounts for section 179 expensing of capital purchases creates a useful way to control your business’s tax obligation. Remember, though, that these two expensing options only change the timing of the amount you can write off, not the overall total amount you can write off.