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Mitchell Baldridge - America’s Accountant

🚨 Senate Tax Bill: Permanent QBI + 100% Bonus Depreciation

Published 2 days ago • 1 min read

@baldridgecpa

ISSUE 38

Breaking Down the Senate's "Big Beautiful Bill"

The Senate just dropped their version of the Big Beautiful Bill, and it contains major wins for business owners. While this version still needs to go through reconciliation with the House bill, there are key provisions that are worth reviewing.

Let's look at what's on the table and what it could mean for your tax strategy.

100% Bonus Depreciation: Back and PERMANENT

This is huge. While the House bill included a phase-out in 2029, the Senate version makes 100% bonus depreciation permanent for property placed in service after January 19, 2025.

What does this mean for you? Instead of depreciating business assets over many years, you can potentially deduct the entire cost in year one. For real estate investors and capital-intensive businesses, this represents massive tax-saving potential.

More Major Wins for Business Owners

The Senate bill delivers several other significant benefits:

  • R&D costs immediately deductible again (retroactive to 2024): No more spreading these costs over 5 years.
  • Business interest deductions switch back to EBITDA instead of EBIT: A substantial advantage for leveraged businesses that will allow greater interest deductions.
  • Passthrough deduction (QBI) stays at 20% and becomes PERMANENT: This critical deduction for small business owners is no longer set to expire.

The QBI phase-in threshold is also increasing from $50k/$100k to $75k/$150k for joint filers. This means more business owners get the full deduction before wage limitations kick in.

The SALT Problem Continues

Now for the not-so-good news. The Senate bill keeps the $10k personal cap on state and local tax deductions AND adds new limits on pass-through entity taxes.

PTE taxes would be capped at the GREATER of $40k or 50% of your PTE taxes. This puts a wet blanket on many state workarounds that high-earners have been using.

The pattern is clear: permanent benefits for depreciation and QBI, but they're closing the SALT loopholes that high earners have been leveraging.

What Happens Next?

This Senate bill still needs to be reconciled with the House version, so changes are likely. The SALT fight is far from over, with representatives from high-tax states pushing back hard on these limitations.

Now is the time to make sure your tax strategy is aligned with where the tax code is heading.

Want to Dig Deeper? Join Our Workshop

I'm teaming up with Nick Huber next week to break down exactly how these proposed changes could impact your bottom line. We'll cover practical strategies for both real estate investors and business owners in light of the Big Beautiful Bill.

Even if you can't make the live session, sign up and we'll send you the recording!

All the best,

Mitchell Baldridge, CPA, CFP®

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Mitchell Baldridge - America’s Accountant

It's not what you make, it's what you get to keep

I work with hundreds of high net worth business owners and real estate investors and spend all my time thinking about how they can give less money to Uncle Sam

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