On July 4, 2025, President Trump signed into law a sweeping tax bill that makes many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) permanent and introduces new incentives and changes that will impact individuals and businesses alike. Below is a summary of the most relevant provisions for our clients at abip CPAs & Advisors:

Key Business Provisions That Passed

Restoration of Full Immediate Expensing for R&D

• Permanently allows 100% expensing of Qualified Research Expenses (QREs), eliminating the need to amortize over 5 years (6 with convention).
• Taxpayers who amortized R&D in 2022, 2023, or 2024 may:
  • Deduct the remaining unamortized portion in 2025, or
  • Elect to deduct over 2025 and 2026.
• Small businesses (gross receipts < $31 million) may amend prior returns to claim missed QRE deductions.
  

abip Insight: We can help evaluate whether to amend past returns or take remaining deductions now. If you haven’t claimed the credit before, now is the time to assess eligibility.

100% Bonus Depreciation Made Permanent

• Qualified business property placed in service on or after January 19, 2025, is eligible for 100% bonus depreciation.
• Reverses the phase-out schedule (previously set to decline to 40% by 2026).

abip Insight: Cost segregation studies can increase deductions by reclassifying property components into shorter life categories eligible for bonus depreciation.

Real estate investment trusts (REITs)

• Can now hold up to 25% of assets through taxable REIT subsidiaries beginning in 2026.

Permanent Extension and Modification of the Excess Business Loss Limitation

• The temporary EBL limitation, originally set to expire after 2028—has now been made permanent.
• Thresholds remain indexed: For 2025, the limitation remains at $500,000 for joint filers and $250,000 for single filers, adjusted annually for inflation.
• Excess business losses cannot be used to offset non-business income (like wages, portfolio income, etc.) beyond the threshold.
• Any disallowed amount is converted into a net operating loss (NOL) in the following year.

abip Insight: flow-through entity owners (e.g., partnerships and S corps) will be significantly affected. Passive investors may see greater limits on using business losses to reduce taxable income.

Increased Cap on State and Local Tax (SALT) Deduction

• SALT deduction cap raised to $40,000 through 2029.
• Cap reverts to $10,000 starting in 2030.

Key Individual Provisions Made Permanent

• Lower Individual Tax Rates: TCJA individual income tax brackets made permanent.
• Expanded Standard Deduction: Made permanent and indexed to inflation.
• Child Tax Credit: Increased to $2,200 per child and indexed to inflation.
• 20% Passthrough Deduction (IRC §199A): Made permanent, with a minimum $400 deduction.
• Estate & Gift Tax Exemption: Increased to $15 million, indexed annually.
• AMT Exemption: Permanently increased and adjusted for inflation.

Provisions Set to Expire or Change in the Future

• SALT Cap Reverts: Increases to $40,000 through 2029 but reverts to $10,000 after that.
• ‘No Tax on Tips’ Deduction: Up to $25,000 in tip income deductible but expires after 2028.
• Energy Credits Phase-Out: Rollback of several clean energy credits, with safe harbor for in-progress projects.

abip Insight: The energy-efficient commercial buildings deduction (179D) now terminates for properties beginning construction after June 30, 2026, tightening the original “12 months after enactment” sunset and providing certainty to project timelines.

ITC/PTC Deadlines under Sections 45Y & 48E – Updated language in Legislation requires all wind (45Y) and solar (48E) to be placed in service by December 31, 2027, to qualify for their respective credits.

Taxpayers will also see the end of the Section 30D Tax Credit for Electric Vehicles acquired after September 30, 2025.

What Should You Do Now?

• Plan Ahead: Scheduling time with your abip team member to perform Multi-year tax planning is critical with sunset provisions approaching in 2028–2030.
• Evaluate Your R&D Claims: Consider amending past returns or electing deduction in 2025.
• Consider Cost Segregation: Maximize depreciation benefits on recent or planned property acquisitions.

Let’s Talk

We are actively analyzing how the final law affects each of our clients. The Strategic Tax Advisory Team at abip is available to:

• Review your past filings.
• Optimize future tax strategies.
• Help you take full advantage of the new provisions.

Contact us today to schedule a complimentary consultation.