Excerpted from The Cotney Brief • Construction Law Simplified, August 2025
- 100% Bonus Depreciation Now Permanent – You can fully expense eligible equipment and property in the year of acquisition with retroactivity starting January 19, 2025.
- Section 179 Expensing Increased – The deduction limit rises to $2.5M, phasing out when purchases exceed $4M.
- Immediate Expensing for U.S. Production Property – Nonresidential property used in manufacturing qualifies for full depreciation if construction begins between January 20, 2025 and the end of 2028 and is placed in service by January 1, 2031 (awaiting additional IRS guidance).
- Restore R&D Expense Deduction – Domestic research expenses are fully deductible in the year incurred; eligible small businesses may be able to amend 2022-2023 (and in some cases 2024) returns, with an election deadline of July 4, 2026.
- Permanent 20% QBI Deduction – The pass-through business deduction is now indefinite, lowering effective top tax rates.
- More Interest Deductions Allowed – The interest expense limit now uses EBITDA instead of EBIT, benefiting capital-heavy companies.
- Higher SALT Cap (Temporary) – SALT deductions increase to $40K (indexed) through 2029, phasing back to $10K in 2030; high earners face gradual phase-outs.
- Accelerated Cutoff for Green Energy Credits – Energy-efficient building deductions (179D) and home credits (45L) now expire after mid-2026.
- Expanded Revenue Deferral for Residential Projects – Larger developments including more than four units can now defer income recognition until project completion.
- Temporary Overtime Deduction (2025–2028) – Workers may deduct up to $12,500 ($25,000 joint) for qualifying overtime pay, subject to income phase-outs.
Takeaway: The OBBB delivers sweeping, mostly taxpayer-friendly changes by locking in lower income tax rates, boosting standard deductions (especially for seniors), and expanding deductions for tips, overtime, and auto loan interest while also raising the SALT cap and enhancing estate and business tax breaks. Most benefits are front-loaded through 2028, meaning individuals and businesses should act now to maximize opportunities before key provisions phase out or revert. Get with your tax professional to verify how the new changes affect you and your business.
Disclaimer: This article is for educational purposes only and does not constitute legal advice or create an attorney-client relationship.
About Trent Cotney
As a Florida Board Certified Construction Lawyer who is also licensed in Illinois, Indiana, Kansas, Massachusetts, Tennessee, Texas, Washington, Wyoming, and DC. Trent focuses his practice on all aspects of construction litigation and arbitration, including OSHA defense, lien law, bond law, and bid protests, as well as construction document review and drafting. He routinely represents general contractors, subcontractors, suppliers, manufacturers, architects, engineers, developers, and others in the construction industry in a variety of matters. He works with lawyers that focus on employment, immigration, corporate matters, intellectual property, and a variety of other legal services.
Reach Trent by calling 866.303.5868 or emailing trent.cotney@arlaw.com
