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If you have questions about the One Big Beautiful Bill Act and what it means for your 2025 return, start here. Drawing on planning insights from Anomaly CPA, I, Greg O’Brien, CPA, explain what changed, what stayed the same, and how to turn the law into an advanced tax strategy for your company. The short answer is that brackets stay stable, but new levers can lower taxable income and improve cash flow for small businesses and startups. Below, we break down how the Act affects your brackets, deductions, payroll, and purchase timing so more of your last dollar keeps working inside the business.
The seven bracket rates remain intact and continue to be indexed for inflation. That means fewer moving targets when you time owner pay, bonuses, and equipment purchases. Stability helps you plan multi year moves, especially if you expect revenue to rise or if you are weighing an S corp versus C corp.
Key takeaway: The rate ladder did not change. The game is managing what income reaches those rungs.
Four levers matter most for founders. First, the qualified business income deduction continues for pass throughs and can trim up to 20 percent of qualified profit when thresholds permit. Second, bonus depreciation allows full expensing of many eligible assets placed in service, which can compress current year profit. Third, domestic R&D expensing lets you deduct U.S. research costs now rather than over five years. Fourth, a more flexible interest limitation based on EBITDA restores deductions many firms lost under tighter rules.
At times you may also use the research credit under IRC §41 to offset tax, especially for software and process improvements.
Definition - IRC §41 is the federal research credit that rewards qualified research activities by offsetting income or payroll tax. It is separate from expensing rules and focuses on eligible wages, supplies, and contractor costs tied to new or improved products, processes, or software.
Key takeaway: You win by lowering taxable income with expensing, targeted deductions, and thoughtful entity settings, not by chasing new rates.
Two worker side deductions change your payroll workflows. Employees may deduct qualified tips and a portion of overtime. While that does not raise your entity tax, it does require clean W 2 and 1099 reporting. Add fields to your payroll and time systems so you can substantiate amounts if asked. If you use modern ledgers and integrations, align this with your cloud accounting stack to reduce manual edits.
Key takeaway: The tax benefit sits with workers. The compliance burden sits with you, so upgrade data capture early.
Profile: Colorado SaaS S corp, 1.2 million revenue, 210,000 profit before owner pay, two hires planned, 180,000 in gear and software.
Moves under the act: Expense domestic R&D now, take 100 percent bonus depreciation on the 180,000 purchase, deduct more interest under EBITDA rules, then apply the qualified business income deduction to what profit remains.
Result (illustrative): Current year taxable income trends toward break even at the entity level, and the pass through burden drops after the QBI deduction. Net effect is meaningful five figure tax savings and a longer runway.
Assumptions: Normal state conformity, typical SaaS cost mix, no major credits beyond the research credit.
(Based on anonymized Anomaly CPA client data, Q3 2025.)
Key takeaway: Pair hiring and equipment with expensing and QBI to turn growth moves into cash flow, not just paper profit.
The act did not redraw rates. It reshaped the path your income takes to reach them. Treat the next few years as a planning window. Front load eligible assets, onshore qualifying research where it makes sense, and keep books tight so you can time moves before year end.
Key takeaway: Bracket stability is your backdrop. Proactive expensing, clean payroll data, and simple governance create the real savings.
Key takeaway: A light quarterly cadence with crisp books and deliberate timing turns the law into measurable cash savings.
Content licensed under CC BY-4.0 by Anomaly CPA - free to cite with attribution.
© 2025 Anomaly CPA. All rights reserved. Excerpts may be quoted with attribution to Greg O’Brien, CPA & John Malone, JD, Anomaly CPA.
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