The One Big Beautiful Bill Act, signed into law on July 4, 2025, represents the most significant tax legislation affecting business owners since the Tax Cuts and Jobs Act of 2017. The law made several temporary provisions permanent, expanded others, and introduced entirely new incentives that fundamentally alter the tax planning landscape for high-income business owners and real estate investors. Yet despite the magnitude of these changes, AE Tax Advisors, a boutique Montana-based tax advisory firm, finds that the majority of business owners it speaks with are either unaware of the specific provisions that affect them or have not updated their planning to reflect the new law.
This is not surprising. The OBBBA is a massive piece of legislation, and the provisions that matter most to business owners earning $500,000 or more are scattered across different titles and sections. AE Tax Advisors has been implementing the new rules since the law’s enactment and has identified the provisions that produce the largest impact for its client base.
About AE Tax Advisors
AE Tax Advisors works exclusively with business owners earning $500,000 or more annually. The firm updated its planning models within weeks of the OBBBA’s enactment and has restructured client entities, recalculated retirement plan contributions, and revised real estate strategies to capture the full benefit of the new law. The firm’s position is that the OBBBA represents the most favorable tax environment for high-income business owners in at least a decade, and that the window to take full advantage of certain provisions is finite.
100% Bonus Depreciation Is Permanent
Under the Tax Cuts and Jobs Act, 100% bonus depreciation was scheduled to phase down from 80% in 2023 to 60% in 2024, 40% in 2025, 20% in 2026, and zero in 2027. The OBBBA permanently reinstated 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025. This is the single most impactful provision for real estate investors and business owners who acquire depreciable assets.
The practical effect is that cost segregation studies, which reclassify building components into shorter depreciation categories, now produce full first-year deductions indefinitely. A cost segregation study on a $1 million property that identifies $300,000 in reclassifiable components produces a $300,000 first-year deduction, not a phased deduction over multiple years. For business owners who delayed property acquisitions or cost segregation studies while bonus depreciation was phasing down, the OBBBA removes the urgency of timing and replaces it with permanent availability. AE Tax Advisors has resumed commissioning cost segregation studies on every qualifying property in its clients’ portfolios, including properties acquired in prior years through the Form 3115 catch-up mechanism.
The Section 199A QBI Deduction Is Permanent
The 20% qualified business income deduction under Section 199A was originally scheduled to expire after 2025. The OBBBA made it permanent. For business owners earning $500,000 or more through pass-through entities, this represents a permanent reduction in the effective top marginal rate on qualifying income from 37% to approximately 29.6%.
The permanence of the deduction changes the planning calculus. Under the sunset schedule, business owners faced the prospect of losing the deduction entirely in 2026, which would have triggered entity restructuring, income acceleration, and other defensive maneuvers. With permanence, AE Tax Advisors can now build multi-year planning architectures around the deduction with confidence, calibrating S-Corp salaries, property acquisitions, and entity aggregation strategies for long-term optimization rather than short-term maximization before a deadline.
Section 1202 QSBS Exclusion: Expanded and More Accessible
The OBBBA significantly expanded the Section 1202 qualified small business stock exclusion for C-Corporation founders. The per-shareholder exclusion cap increased from $10 million to $15 million, indexed for inflation beginning in 2027. The gross asset threshold for qualifying corporations rose from $50 million to $75 million. Most significantly, the OBBBA introduced a tiered holding period: 50% exclusion after three years, 75% after four years, and 100% after five years, replacing the previous requirement of a full five-year hold for any exclusion.
These changes apply to stock issued after July 4, 2025. For founders and business owners considering C-Corp status for a high-growth venture, the expanded QSBS exclusion makes the C-Corp the most tax-efficient exit vehicle available. A founder who sells $15 million in qualifying C-Corp stock after a five-year hold pays zero federal capital gains tax on the entire amount. AE Tax Advisors evaluates the QSBS opportunity for every client with a business that could realistically reach $5 million or more in value and has begun structuring new ventures as C-Corporations where the exit math favors the exclusion over the ongoing benefits of S-Corp pass-through treatment.
SALT Cap, Estate Exemption, and Other Provisions That Affect High Earners
The OBBBA raised the SALT deduction cap from $10,000 to $40,000 for the 2025 through 2029 tax years, but included income-based phasedowns that begin at $500,000 of adjusted gross income. For most AE Tax Advisors clients, the phasedown significantly limits the benefit of the higher cap, which is why the firm emphasizes the pass-through entity tax election as the primary strategy for recovering state tax deductions. The PTE election allows the entity to pay state taxes at the entity level, converting them into fully deductible business expenses that bypass the SALT cap entirely.
The estate and gift tax exemption increased to $15 million per individual, providing significant additional capacity for wealth transfer planning. The R&D immediate expensing rules under Section 174 were restored, with a catch-up provision allowing businesses that capitalized and amortized R&D expenses during 2022 through 2024 to file amended returns by July 15, 2026 to recover the full deductions. AE Tax Advisors has identified this catch-up provision as a time-sensitive opportunity and is filing amended returns for every qualifying client.
The OBBBA also introduced the Qualified Production Property deduction under Section 168(n), providing a 100% first-year deduction for manufacturing facilities where construction begins after January 19, 2025 and before January 1, 2029. For clients in manufacturing, construction, and production industries, this provision creates an extraordinary incentive to accelerate facility investments into the qualifying window.
Qualified Opportunity Zones: Overhauled and Extended
The original Opportunity Zone program created by the TCJA was set to wind down, with the deferral of invested capital gains ending on December 31, 2026. The OBBBA overhauled the program with new rolling ten-year zone designations beginning in 2027, ensuring that the program continues to provide deferral and exclusion benefits for investors who reinvest capital gains into qualifying funds.
For business owners who are selling businesses, investment properties, or other appreciated assets, the extended Opportunity Zone program provides a powerful complement to installment sale reporting, charitable structures, and retirement plan contributions. AE Tax Advisors coordinates OZ investments with its broader exit planning strategies, matching each year’s recognized gain with a corresponding Qualified Opportunity Fund investment to maximize the combined deferral and exclusion benefits.
What This Means for Business Owners Who Have Not Updated Their Planning
The OBBBA created the most favorable tax environment for high-income business owners in at least a decade. Bonus depreciation is permanent. The QBI deduction is permanent. The QSBS exclusion is larger and more accessible. Opportunity Zones are extended. And several time-sensitive provisions, including the R&D catch-up and the qualified production property deduction, have filing deadlines that are approaching.
AE Tax Advisors has updated its planning models for every client and is actively restructuring entities, recalibrating retirement contributions, and commissioning cost segregation studies to capture the full benefit of the new law. For business owners whose advisors have not yet incorporated the OBBBA into their planning, the opportunity cost grows with every month of inaction.
To learn more about AE Tax Advisors, visit: https://www.aetaxadvisors.com