On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law, and it rewrites a meaningful chunk of the tax rules our clients plan around. Some of it is straightforward good news. Some of it is temporary and worth acting on before it expires. All of it is worth fifteen minutes of your attention before year-end planning gets underway.
Below is a plain-language look at what changed, organized around the three groups we hear from most: business owners, individuals and families, and the nonprofits (and donors) we work with.
For business owners
If you run a business, several provisions in OBBBA directly affect how much you can deduct this year and how you plan capital purchases.
- 100% bonus depreciation is back. Qualified property and equipment placed in service after January 19, 2025 can be fully expensed in the year you buy it, rather than depreciated over several years.
- Section 179 expensing nearly doubled. The limit is now $2.5 million, giving small and mid-sized businesses more room to write off equipment and software purchases immediately.
- The 20% qualified business income (QBI) deduction is permanent. If you operate as an LLC, S-corp, or other pass-through entity, this deduction is no longer set to expire, which makes multi-year planning easier.
- R&D expensing is restored. Domestic research costs are deductible again starting in 2025, and businesses with average gross receipts under $31 million can apply the change retroactively to 2022.
- The employer child care credit grew. Small businesses (under $31 million in gross receipts) can now claim a 50% credit up to $600,000, which is worth a look if you offer or are considering a child care benefit.
The short version: if you were holding off on equipment purchases or a facility upgrade, the tax math just got more favorable.
For you, personally
Business owners file two returns that matter here — the business’s and their own. A few individual provisions are worth flagging.
- The SALT deduction cap jumped from $10,000 to $40,000 for 2025 through 2029, with the cap increasing 1% each year. It phases back down toward $10,000 for single filers earning over $250,000 and joint filers over $500,000, so the benefit is largest for owners below those thresholds.
- New, temporary deductions for tips and overtime. Through 2028, tipped income is deductible up to $25,000 and overtime pay up to $12,500 ($25,000 for joint filers), phasing out above $150,000 (single) or $300,000 (joint) in income. If you employ tipped or hourly staff, this is worth flagging to them directly.
- The standard deduction increase is now permanent and rises to $15,750 for single filers and $31,500 for joint filers, indexed for inflation going forward.
For nonprofits and the donors who support them
We work with several nonprofit clients, and this is the area where OBBBA changes behavior the most.
- The estate tax exemption doubles to $15 million per person ($30 million per couple) starting in 2026, indexed for inflation. This changes the calculus for donors who use estate planning as part of their giving strategy.
- A new deduction for non-itemizers arrives in 2026 — up to $1,000 for individuals or $2,000 for joint filers who give to charity, even if they take the standard deduction. Gifts to donor-advised funds don’t qualify.
- Itemized giving now has a floor. Only the portion of charitable gifts above 0.5% of income is deductible. A donor earning $200,000 who gives generously will find the first $1,000 of that giving no longer counts.
- Corporate giving has a new floor too — companies now need to give at least 1% of taxable income before any of it is deductible.
For nonprofits, the practical takeaway is timing: 2025 is the last year before the new floor kicks in, which makes it an unusually good year to talk to major donors about accelerating a gift.
What to do before year-end
None of this requires an immediate decision, but a few things are worth putting on the calendar:
- Revisit any equipment or facility purchases you’d tabled — the depreciation math changed in your favor.
- If you have tipped or hourly employees, make sure your payroll records will support the new deductions.
- If your household is near the SALT phase-out thresholds, run the numbers before year-end rather than after.
- If you sit on a nonprofit board or give significantly, have the 2025-vs-2026 giving conversation now, not in December.
This is a general overview, not personalized tax advice — the right move depends on your specific numbers and entity structure. If you want to walk through what OBBBA means for your situation, that’s exactly the kind of conversation we like to have.