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Ext. PublicationOBBBA & Bonus Depreciation | Podcast
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On the Shop Floor
How do recent legislative changes impact one’s financial strategies? In this episode of Weaver: Beyond the Numbers, On the Shop Floor, Kurtis Dixon and Marvin Ferguson dive into the details of the recent tax legislation, One Big Beautiful Bill Act (OBBBA). They break down the legislation’s critical changes that could redefine your financial planning and tax efficiency.
Key Points:
- Bonus depreciation is now at 100% for properties under twenty years, significantly boosting investment incentives.
- The reversal of amortization on Section 174 expenses simplifies research and development (R&D) cost handling, aligning with global practices.
- Introducing qualified production property (QPP) provides substantial tax benefits for production facilities.
Kurtis and Marvin zone in on the major shifts driven by the OBBBA, including the return of 100% bonus depreciation and the ability to fully write off research and development (R&D) expenses. There’s renewed focus on using these tax benefits to inform capital expenditure strategies and manage innovation spend. By moving away from required amortization and back to immediate expensing, organizations gain simpler, more flexible options to support growth. Marvin explains that the return to Section 174 expensing, alongside access to the R&D credit, makes the rules “a much easier thing to work with” for businesses.
The OBBBA introduces qualified production property (QPP), a new category that creates a potential pathway for businesses to accelerate deductions on certain production-related facilities. However, it’s crucial to evaluate the specifics of each property to use QPP effectively. The hosts also touch on changes to Section 163(j), which may allow some businesses to increase interest expense deductions, offering further tax relief to organizations with meaningful debt.
Kurtis and Marvin close with a few year-end reminders. Marvin urges teams to take stock now: “Let’s get an estimate of where you’re sitting today … go buy something that you need. Don’t just buy it just to buy it but buy something that is required and get that taxable number down to as close to zero as we can.” They encourage businesses to reassess their current tax position, consider year-end qualifying purchases and document assets placed in service.
Subscribe and listen to future episodes of Weaver: Beyond the Numbers, On the Shop Floor on Apple Podcasts or Spotify.
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