Trump’s 2025 Tax Bill: A Look at the “One, Big, Beautiful Bill.”

The reintroduction of Donald Trump’s tax agenda in 2025 has come with substantial fiscal propositions, many of which are poised to reshape the way investors and business owners plan their financial futures. While much attention has been paid to the broad strokes of the so-called One Big Beautiful Bill, three specific tax components have emerged as game-changers: 100% Bonus Depreciation, an expanded Section 179 deduction, and a bump in Qualified Business Income (QBI) deductions. Together, these elements are poised to energize business growth, attract investment, and offer lucrative tax planning strategies—especially for real estate investors and small business owners.

100% Bonus Depreciation: Back and More Powerful Than Ever

Perhaps the most headline-grabbing provision in Trump’s 2025 tax agenda is the return of 100% Bonus Depreciation. Initially introduced under the Tax Cuts and Jobs Act (TCJA) in 2017, the benefit allowed businesses to immediately write off the full cost of qualified property in the year it was placed in service. The deduction gradually phased down beginning in 2023, reducing the benefit to 80% and declining thereafter.

Now, the 2025 proposal brings it back in full force: 100% Bonus Depreciation is slated to return retroactively to January 19, 2025, and will be available for another four years. This policy shift could not come at a better time for industries like real estate, construction, logistics, and manufacturing, all of which rely heavily on capital-intensive purchases.

Why It Matters

Bonus depreciation is particularly attractive because it accelerates tax deductions, thereby increasing a business’s current-year cash flow. For example, a real estate investor purchasing a rental property can apply cost segregation to identify eligible components—like HVAC systems, flooring, and appliances—and write them off entirely in year one. This upfront deduction reduces taxable income dramatically, enhancing return on investment.

Investors and business owners alike can now rethink capital allocation strategies. Instead of staggering purchases over multiple years to maximize deductions, they can act boldly—knowing that new equipment, vehicles, or improvements can be deducted in full right away. This also opens the door for more aggressive real estate investments, as cash-on-cash returns improve when initial tax liabilities are minimized.

Notably, since the retroactivity applies to property placed in service as of January 19, 2025, this provides a brief window for strategic acquisitions to capitalize on the updated rule. Companies with purchases on hold now have an incentive to act, making this provision both an economic stimulus and a tax planning advantage.

Section 179 Expansion: Supercharged Deduction Cap for Small Businesses

In tandem with bonus depreciation, the 2025 tax proposal delivers a significant boost to Section 179, a long-standing tax provision that allows businesses to immediately expense qualified purchases rather than capitalizing and depreciating them over time.

Previously, the Section 179 deduction limit was set at $1 million, with a phase-out threshold beginning at $2.5 million. Under the new plan, the expensing cap is expected to increase to $2.5 million, with the phase-out beginning at $4 million. This change vastly enhances the ability of small and mid-sized businesses to deduct large investments in equipment, software, and business property.

Practical Implications

This expansion is more than a numerical adjustment—it reshapes how small businesses approach capital budgeting. With a higher cap and broader eligibility, businesses will be able to:

• Upgrade infrastructure without worrying about losing deduction opportunities due to the phase-out rules.
• Invest in modern technology and software, improving productivity and efficiency.
• Reinvest in physical growth, such as acquiring or improving property and facilities.

Moreover, Section 179 is often used alongside bonus depreciation. While both allow immediate expensing, Section 179 provides more flexibility for certain property types and includes options for partial deductions based on usage. The expansion means more businesses will qualify to take full advantage of both programs.

Qualified Business Income (QBI) Deduction: From 20% to 23%

Another major enhancement under the new tax proposal is a 3% increase to the Qualified Business Income (QBI) deduction, bringing it from 20% to 23%. Originally enacted under the TCJA, the QBI deduction allows eligible owners of pass-through entities—such as sole proprietorships, partnerships, S-corporations, and some trusts—to deduct a portion of their business income from taxable income.

The new increase may appear modest at first glance, but the impact is substantial when scaled across income thresholds. A 3% jump could result in thousands of dollars in tax savings annually, especially for entrepreneurs, consultants, medical professionals, and freelancers.

Who Benefits?

The expanded QBI deduction provides the most value to:

• High-earning small business owners, who are just under the income thresholds for deduction limitations.
• Real estate professionals, whose income often qualifies as QBI, especially when rental activities rise to the level of a trade or business.
• Service-based industries, including law, accounting, and healthcare practices, that qualify under specific wage and capital conditions.

Additionally, the move may reignite conversations about entity structure. Entrepreneurs operating as sole proprietors may choose to incorporate or restructure into pass-through entities to maximize the deduction. Accountants and tax planners will play a critical role in helping businesses evaluate the best structure for tax optimization.

Real Estate: The Big Winner

Individually, each of these provisions enhances cash flow, strengthens profitability, and supports business expansion. But when combined, they create a powerful trifecta—especially for real estate investors.

Here’s why real estate stands to benefit enormously:

• 100% Bonus Depreciation allows cost segregation studies to unlock major first-year deductions, improving after-tax returns.
• The QBI increase to 23% further reduces effective tax rates on net rental income, maximizing profitability.
• With Section 179’s higher thresholds, real estate operators with office or hospitality assets can immediately deduct furnishing, equipment, and systems upgrades.

In essence, this new tax proposal reestablishes real estate as one of the most tax-advantaged asset classes. Lowered taxable income means more capital available for reinvestment, expansion, or debt reduction. For syndicators and private equity firms, these changes make investor returns more attractive—fueling even more capital inflow into the sector.

Final Thoughts: Strategic Planning Is Key

While the 2025 tax bill spans hundreds of pages, the return of 100% bonus depreciation, the expansion of Section 179, and the increase in QBI deductions stand out as immediate, actionable provisions with the power to reshape tax strategy.

Business owners and investors must act quickly and strategically to take full advantage. That means:

• Reassessing planned purchases to align with the retroactive start of bonus depreciation.
• Consulting tax advisors on eligibility and optimal structure for Section 179 and QBI.
• Considering entity restructuring to qualify for enhanced QBI benefits.

As more details of the “Beautiful Bill” emerge, it’s clear that these three provisions alone are enough to reinvigorate economic investment and reward entrepreneurial risk. Whether you’re a seasoned real estate investor or a small business owner looking to grow, these tax changes are not just beneficial—they’re transformative.