The tax landscape is undergoing a significant transformation. With the enactment of the One Big Beautiful Bill Act (“OBBBA”) and shifting state regulations, tax professionals and business leaders face a complex environment for the upcoming fiscal years. At our recent 2025 CPA ShopTalk presentation, we discussed these critical updates to help you prepare for what lies ahead. Here are the top insights from our presentation.

1. OBBBA Solidifies Individual Income Tax Rates

One of the most significant aspects of the OBBBA is the stabilization of individual income tax rates. Under the Tax Cuts and Jobs Act of 2017 (the “TCJA”), many individual provisions were set to expire at the end of 2025, which would have triggered a return to higher pre-TCJA rates. The OBBBA makes the TCJA income tax rates and index amounts permanent for tax years beginning after December 31, 2025. This provides much-needed certainty for long-term planning. Additionally, the standard deduction amounts have been increased and indexed for inflation, further benefiting taxpayers who do not itemize.

2. A Temporary Reprieve for the SALT Deduction 

The State and Local Tax (“SALT”) deduction cap has been a point of contention for years. The OBBBA introduces a temporary increase in this cap, offering relief to taxpayers in higher-tax jurisdictions. For the 2025 tax year, the SALT cap rises to $40,000. From 2026 through 2029, this cap will see a 1% annual increase before reverting to $10,000 in 2030. However, high-earners should note that for Modified Adjusted Gross Income (“MAGI”) in excess of $500,000, the deduction phases out, though it will not drop below the $10,000 baseline.

3. Permanent Business Incentives: Qualified Business Income (“QBI”) and Bonus Depreciation

For the business sector, the OBBBA delivers stability by making two popular TCJA provisions permanent. First, the QBI deduction is here to stay, maintaining the 20% deduction for pass-through entities. Second, the additional first-year “bonus” depreciation, which was scheduled to phase out, has been made permanent for qualified property acquired after January 19, 2025. This allows businesses to continue accelerating cost recovery on capital investments, improving cash flow and encouraging growth.

4. Major Shifts in Charitable Contribution Rules

Charitable planning strategies may need to be adjusted starting in 2026 due to new floors and ceilings on deductions.

The OBBBA permanently enacts a 60% ceiling for cash gifts to public charities. However, it also introduces a new hurdle: otherwise deductible donations will be reduced by 0.5% of an individual’s contribution base (generally AGI). For corporations, while the 10% cap is extended, a new floor requires contributions to exceed 1% of revenue to receive any deduction. These changes make donor-advised funds (DAFs) and bundling strategies more relevant than ever.

5. The Estate and Gift Tax Exemption Jumps to $15 Million

High-net-worth families have a significant opportunity beginning in 2026. The OBBBA permanently increases the federal estate and gift tax exemption to $15 million, effective for decedents dying and gifts made after December 31, 2025.

This substantial increase, indexed for inflation, allows for the tax-free transfer of significant wealth. However, with the changing political landscape, utilizing exemptions sooner rather than later to lock in benefits may avoid the risk of losing out on the exemption.

6. IRS Operational Strains May Cause Delays

While the laws are changing, the agency enforcing them is facing challenges. Recent reports indicate a reduction in force at the IRS, with thousands of workers exiting since early 2025 and more than 170 attorneys withdrawing from Tax Court cases. Practitioners should anticipate increased hold times, administrative delays, and a potentially slower resolution process for controversies. Patience and proactive communication will be essential when dealing with tax collection and dispute matters in the coming year.

7. Washington State Aggressively Expands Tax Base

For clients with a footprint in the Pacific Northwest, Washington State has introduced major tax increases. Effective October 1, 2025, the definition of a “retail sale” expands to include a wide range of services previously exempt, such as IT services, custom website development, and consulting.

Furthermore, Business and Occupation (B&O) tax rates are increasing for most classifications, and a new surcharge will apply to high-grossing businesses starting in 2026. This expansion may require an immediate review of service contracts and invoicing procedures to ensure sales tax compliance.

8. Evolving Digital Asset Landscape

As digital assets, such as cryptocurrency and NFTs, become more widely accepted, the regulatory and tax landscape is evolving.

The presentation addressed recent developments under the Trump administration in 2025, which has signaled a renewed effort to strengthen U.S. leadership in global digital asset markets. Through new legislation and executive orders, the administration has sought to provide clarity, ease certain prior restrictions, and delay or modify reporting requirements.

Finally, the presentation emphasized that, despite regulatory shifts, tax considerations remain. Various cryptocurrency transactions (including sales, exchanges, staking, and airdrops) may trigger taxable events, underscoring the importance of careful planning, documentation, and ongoing monitoring of regulatory and tax developments in this fast-changing area.

9. Updates to Oregon’s Natural Resource Exemption

For Oregon-based clients in agriculture, forestry, and fishing, changes to the Oregon Natural Resource Exemption (“ONRE”) are critical. The exemption allows for up to $15 million in relief for qualifying natural resource property.

Recent updates clarify “material participation” rules, modifying the “75% of days” requirement to “75% of relevant business days.” This nuance better reflects the seasonal nature of industries like forestry. Proper documentation of active management is now more vital than ever to secure this valuable exemption.

Navigating the Changes

The sheer volume of changes introduced by the OBBBA and state-level updates create both challenges and opportunities. Whether you are restructuring a business to maximize the permanent QBI deduction or revising an estate plan to leverage the $15 million exemption, proactive planning is often the key to success.

This article summarizes aspects of the law and opinions that are solely those of the authors. This article does not constitute legal advice. For legal advice regarding your situation, you should contact an attorney.