One Big Beautiful Bill Act (Part 2)
The recently passed tax legislation, informally known as the “Big Beautiful Bill,” includes several provisions that could be relevant to high earners, business owners, and investors in 2025. In this follow-up, we focus on two key areas generating the most strategic conversations: the return of 100% bonus depreciation and the expanded SALT deduction cap.
First, click here if you haven’t seen our original summary of the bill, or watch the video overview below from our friends at J.R. Martin & Associates.
Bonus Depreciation: Permanently Restored to 100%
One of the bill's most significant changes is the restoration of 100% bonus depreciation, which had previously been on a phase-down schedule.
What Changed
Under the new law, businesses can immediately expense 100% of the cost of qualified property placed in service on or after January 20, 2025. This provision is now permanent, reversing the prior schedule that would have reduced bonus depreciation to 60% in 2025 and eventually phased it out completely by 2027.
What Qualifies
Business-use vehicles over 6,000 lbs
Equipment and machinery
Technology assets with a useful life of 20 years or less
Qualified improvement property for real estate
Why It Matters
Accelerating depreciation can significantly reduce taxable income and improve after-tax cash flow. This could be especially beneficial for businesses planning major purchases, upgrades, or cost segregation studies in the next few years.
Things to Keep in Mind
Property must be placed in service, not just purchased, by year-end.
Application of the deduction may vary depending on entity type and income level.
This change opens doors for multi-year planning rather than temporary year-end strategies.
SALT Deduction Cap Increased (With Limits)
Another headline provision is the increase to the State and Local Tax (SALT) deduction cap, which had been limited to $10,000 since the Tax Cuts and Jobs Act of 2017.
What Changed
Beginning in 2025, the cap increases to $40,000 per taxpayer ($80,000 for married couples filing jointly). However, this expanded cap phases out for higher earners and expires after 2029.
The cap begins to phase down once modified adjusted gross income (MAGI) exceeds $500,000, and by ~$600,000 (indexed annually), the deduction is reduced back to the $10,000 cap.
Who Might Benefit
Taxpayers in high-tax states (CA, NY, NJ, CT, IL)
Dual-income households with significant property taxes
Business owners with high pass-through income
Filers close to or just under the phase-out thresholds
Strategic Considerations
Higher SALT caps may influence whether you itemize vs. take the standard deduction
Timing of state income and property tax payments could become more relevant
May impact how and when you group charitable giving or mortgage interest
What This Means for Your 2025 Planning
While these provisions present potential opportunities, how they apply depends on your income, filing status, business structure, and investment activity.
At Vanir Tax & Capital, we help clients evaluate new tax law changes within the broader context of their goals. From bonus depreciation strategies to re-evaluating deduction thresholds, we work closely with clients and their financial advisors to bring clarity and confidence to complex planning decisions.
Need help?
If you’d like to explore these changes in more detail, we’d be happy to connect. Click here to schedule a FREE Tax Strategy Call.
