Recent law changes require a new look for your business. The One Big Beautiful Bill Act (OBBBA) introduces several changes that impact the business landscape. These changes will affect both small and large companies. Here are some of the significant changes and respective tips to consider when forecasting your business tax obligation.

SALT deduction increase requires planning

The itemized deduction limit for taxes, 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-through entities (to 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 (otherwise known as PTET).

This change now requires some planning. Therefore, we recommend that you 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.

Forecasting your business tax obligation

The qualified business deduction (QBI) is now permanent with the current legislation. Without the change, this deduction was going to end in 2026. When you combine this change with the unchanged C-Corporation tax rate of 21%, it presents a bit of certainty in the tax horizon for businesses. So, with much of the uncertainty in business tax rates now resolved, it might be a good time to review your entity choice.

Additionally, the continuation of expense options for capital purchases is something to consider. 100% bonus depreciation and expansive amounts for Section 179 expensing of capital purchases provide a helpful way to manage your business’s tax obligations. Please contact our RRBB advisors to discuss forecasting, compliance, and other provisions from the new tax bill that may affect your business.