Enacted into law on July 4, 2025, the One Big Beautiful Bill Act is the biggest set of tax law changes since the 2017 Tax Cuts and Jobs Act (TCJA). The provisions discussed in this article impact individual taxpayers for tax year 2025 and must be considered immediately for proactive tax planning purposes, future tax withholding, and estimated tax payment calculations. Clients have questions, and we can generally give them the answers they seek; however, some will require future IRS guidance for complete clarity.
D&A Planning After the One Big Beautiful Bill Act
Ted Stotzer
After 2021, whether an expenditure was deducted currently or recovered through depreciation often affected timing, but it typically did not create a meaningful advantage from a Section 163(j) perspective. The restoration of depreciation, amortization, and depletion addbacks in the computation of adjusted taxable income (“ATI”) has changed that analysis and created a new opportunity for taxpayers with actual or anticipated interest limitation exposure. As a result, taxpayers should reconsider whether certain expenditures that historically may have been deducted immediately can instead be capitalized into depreciable or amortizable property in order to improve their Section 163(j) profile.
