Financial advisors and tax professionals with clients who own businesses of any size can help them rake in significant savings under several provisions of the One Big Beautiful Bill Act.
The massive legislation signed into law by President Donald Trump last month tweaked tax rules on business deductions, capital-gains exclusions and estate planning. Those changes will require advisors and their clients to take a fresh look at their strategies, according to Jere Doyle, an estate planning strategist with BNY Wealth, and Holly Swan, the head of wealth solutions in the global client strategy unit of asset management firm
Outside of the
"QBI and 199A aren't really the big news that people had hoped they would be," she said, noting that "no one was anticipating" the Senate's changes to the guidelines for qualified small business stock. "The rules have always been great, but they haven't really kept up with the times. And I think the new rules are pretty amazing."
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Business expenses and depreciation
With
In particular, the alterations in Sections 168 and 179 of the code amount to "an incentive for people to buy stuff" in ways that "will boost sales" of heavy machinery, Doyle noted. By raising the possible annual equipment expense deduction to $2.5 million (subject to phaseouts based on income) and enabling the businesses to depreciate capital investments based on their full cost up front rather than in the "straight line" method, those provisions of the law alone could push up the value of many businesses.
"The message is, people can write stuff off sooner, deduct it sooner," Doyle said. "That lowers their taxable income and increases the amount you take home."
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Qualified small business stock
Just as those rules seek to promote economic activity, the legislation bulks up the capital-gains exclusions available for qualified small business stock under Section 1202 as a means of spurring investment, Swan noted.
The legislation beefed up the criteria for eligibility to businesses valued at as much as $75 million with inflationary adjustments
"It's really an acknowledgement of the fact that some of these small businesses do sell faster than expected," Swan said. "It's a really big incentive to invest in American small businesses that a lot of people didn't see coming. … So hopefully that will be extremely stimulative for small businesses."
Those provisions offer "a little bit more leeway" in that the "company can be a little bit bigger to qualify," Doyle noted. While the fact that the company
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Snacks and meals for the team not tax-friendly anymore
On the other hand, the need
That provision didn't receive as much attention as, say, the tense negotiations on the deduction for state and local taxes. But Swan has received several calls from advisors about it, she said.
"I had viewed it as a non-issue," Swan said. "I just think we're all going to bring in our own snacks, but I was shocked by how many people called me."
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Section 199A deduction for qualified business income
The final legislation also made permanent
Regardless, the combination of the extension of the qualified business income deduction and the Senate's removal of a part of the House version of the bill that would have "done a big scale-back" of a so-called
"People with pass-through entities who live in those high-tax states can still benefit," she said. "I end up getting a lot more questions about PTET than I do about QBI."
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Estate taxes
While they may be applicable to many non-business owners as well, other provisions of the law that expanded the
"We encouraged people to do things