What Businesses Need to Know Now: Key Tax-Planning Strategies Under the One Big Beautiful Bill Act

The recently passed One Big Beautiful Bill Act (OBBBA) is already reshaping the tax landscape for both individuals and businesses. With sweeping changes ranging from deductions and credits to entirely new rules for international taxation, it’s more important than ever to understand how these updates may impact your financial planning. For those in Green Bay and surrounding areas, staying ahead of these changes can make a big difference when it comes time for tax prep.

Major Business Provisions

One of the most significant changes under OBBBA is the overhaul of international taxation. The Global Intangible Low-Taxed Income (GILTI) regime has been replaced with the Net Controlled Tangible Income (NCTI) system. Similarly, the Foreign-Derived Intangible Income (FDII) deduction has been revised and rebranded as the Foreign-Derived Domestic Economic Income (FDDEI) deduction. While these provisions may seem tailored for multinational corporations, even smaller companies engaged in exporting could be affected.

For domestic businesses, bonus depreciation rules remain favorable, although the phase-out schedule is still in motion. That means timing capital expenditures is more critical than ever. For example, purchasing equipment before year-end may allow for a much larger deduction than delaying until the next calendar year. Businesses in De Pere that are considering expansions or upgrades should evaluate the financial impact with their CPA before making large investments.

Individual Taxpayer Benefits

On the personal side, OBBBA introduced several taxpayer-friendly changes. Notably, tips and overtime pay are no longer subject to federal income tax. This is a huge win for service industry employees, many of whom are based in communities like Green Bay. Additionally, deductions have been expanded in specific areas, including a limited allowance for auto-loan interest if the vehicle was assembled in the United States.

The state and local tax (SALT) deduction has also been adjusted. For years, taxpayers in higher-tax states faced limitations on how much they could deduct. Under the new law, the cap is loosened, giving many families a more substantial tax break. This could directly impact households in Wisconsin who itemize deductions, especially those with property taxes that previously exceeded the cap.

Planning Considerations

While these changes sound positive, they require careful planning. For businesses, understanding which expenses qualify under the new rules and which deductions are temporary versus permanent is essential. For individuals, knowing when to adjust withholding or estimated payments could mean the difference between a smooth filing season and an unexpected tax bill.

At Millhouse Accounting, we recommend that both individuals and businesses start by reviewing their year-to-date financial position. Business owners in De Pere should pay particular attention to timing income and expenses, as OBBBA’s changes could alter when deductions provide the most benefit. Individuals who expect significant overtime or tip income may also want to review their withholding strategy to ensure they are not overpaying taxes unnecessarily.

Potential Pitfalls

As with any large piece of legislation, pitfalls exist. Some taxpayers may mistakenly assume all charitable contributions are now fully deductible, but that remains subject to existing rules. Others may overlook the phase-out of certain benefits, only to find themselves surprised during tax prep season. For example, not every vehicle purchase will qualify for the new auto-loan interest deduction—eligibility depends heavily on where the vehicle was manufactured.

Similarly, businesses must be cautious when interpreting international provisions. Misapplying the NCTI or FDDEI deductions could lead to costly errors. Partnering with a CPA who can navigate these rules is key to avoiding mistakes.

Looking Ahead

The One Big Beautiful Bill Act is designed to provide clarity and relief in certain areas while still generating needed federal revenue. For taxpayers in Green Bay and beyond, the challenge lies in adapting quickly. The best approach is to take a proactive stance: review records now, update strategies, and schedule time with your CPA before the year ends.

At Millhouse Accounting, we help individuals and businesses navigate these changes with confidence. Whether you’re a business owner in De Pere planning your next expansion or a family simply looking to maximize deductions, understanding OBBBA is critical.

If you have questions about how the new law affects you, now is the perfect time to review your situation. Reach out to our office, and let us help ensure your tax prep strategy is aligned with today’s evolving tax landscape.