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On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. This sweeping legislation makes major changes to both individual and business tax rules — and while some things get easier, others will require smart adjustments.
If you’re a therapist or small practice owner, here’s a guide to what’s changed — and more importantly, what you should do now to take advantage of the new rules (or avoid costly mistakes).
How Will This Affect Your Family?
Child Tax Credit Increased
Starting in 2025, the credit rises to $2,200 per child, with $1,400 refundable. Income limits have also increased, expanding eligibility for many dual-income households.
Action Step: If you have children under 17, review your 2025 estimated taxes — you may be able to reduce quarterly payments.
SALT Deduction Cap Expanded
Beginning in 2025, joint filers with AGI under $500,000 can deduct up to $40,000 in state and local taxes — a significant increase from the previous $10,000 cap.
Action Step: In high-tax states, consider prepaying property or state taxes in 2025 to maximize your deduction.
Charitable Deductions Without Itemizing
Starting in 2026, non-itemizers can deduct up to $2,000 (joint) or $1,000 (single) in charitable giving.
But: If you itemize, charitable deductions in 2026 and beyond will only count above 0.5% of AGI.
Action Step: If you normally itemize, consider bunching charitable gifts into 2025 before the new floor applies.
Child and Dependent Care Credit Increased
Starting in 2026, the credit for child and dependent care expenses will increase to a max of $1,500 for a single child (up from $1,050) and $3,000 for two or more children (up from $2,100)
Action Step: If you’re considering changes to childcare arrangements for 2026, be aware of the opportunity to claim higher tax credits. Make sure you collect the necessary tax info from the childcare providers.
What Should You Do About Your Business?
QBI Deduction Made Permanent
The 20% deduction for S-Corp and sole proprietorship income is now permanent, with increased thresholds for phaseouts.
Action Step: Review your salary vs. distribution balance in your S-Corp. With the QBI deduction here to stay, now is the time to optimize.
R&D Expenses Now Fully Deductible
Starting January 1, 2025 (and potentially retroactively to 2022), you can fully deduct expenses related to developing EHR systems, client portals, or practice software.
Action Step: If you made tech investments in prior years, consider amending past returns. Going forward, track these expenses closely to deduct them in the year incurred.
100% Bonus Depreciation Returns
As of January 20, 2025, you can once again fully deduct qualifying purchases like office furniture and technology. The Section 179 limit also increases to $2.5 million.
Action Step: If you’re planning an office refresh, equipment upgrades, or expansion, time your purchases for 2025 to take full advantage.
Paid Leave and Child Care Credits Expanded
Starting in 2026, tax credits for employers who offer paid family and medical leave or on-site/dependent child care are expanded and made more flexible.
Action Step: If you plan to grow your team, factor these incentives into your benefits strategy.
Higher 1099 Filing Threshold
Beginning in 2025, you’ll only need to issue 1099s to independent contractors if you pay them more than $2,000/year (up from $600).
Action Step: Update your vendor tracking systems now to streamline your reporting for next tax season.
What’s New for Health and Wellness?
HSA Eligibility and Expanded Uses
Beginning in 2026:
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Bronze and catastrophic plans will qualify for HSA contributions
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Up to $150/month can be used for direct primary care
Action Step: Review your health plan for 2026 and consider increasing your HSA contributions to take full advantage of the expanded use rules.
ACA Premium Tax Credits
Premium subsidies for marketplace health plans are extended; however if you claim excess credits you’ll now need to pay back the entire excess with no limit.
Action Step: Revisit your current monthly credits claimed for ACA plans and make sure they are in line with your actual expected AGI for the year (which may have changed since you initially applied for credits last year). Be prepared to potentially pay back more then you did in the past.
What’s Changing for Cars and Commuting?
Car Loan Interest Is Now Deductible
Beginning in 2025, interest on new, U.S.-manufactured vehicles used for personal purposes is deductible — up to $10,000 per year, subject to income phaseouts.
Action Step: Planning to buy a new car? Make the purchase in 2025 and confirm eligibility under the new rules.
EV Tax Credits Expire
Electric vehicle tax credits (for both individuals and businesses) expire after September 30, 2025.
Action Step: If you’re considering an EV purchase, make it before the September deadline to qualify for the $4,000–$7,500 credit. Of course be sure to first check it’s a qualifying vehicle.
What About Wealth and Legacy Planning?
Trump Accounts for Children
Starting in July 2026, you can contribute up to $5,000/year into new tax-favored savings accounts for children. Employers can contribute $2,500/year for their employees’ dependents or teenage workers.
Action Step: Business owners with teen staff or young dependents — keep this in mind for 2026 planning.
Estate and Gift Tax Exemption Extended
The current exemption (over $13 million per person, set to expire 12/31/25) is made permanent and increases to $15 million in 2026 and is indexed for inflation.
Action Step: If you’re planning wealth transfers, this window remains favorable for gifts, trusts, or other planning moves.
Corporate Charitable Deduction Floor Established
Effective 2026, C-Corporations can now only deduct charitable contributions that exceed 1% of taxable income, with a limit of 10%.
Action Step: If your group practice is structured as a C-Corp, review your giving strategy to take advantage of the current higher limit.
Qualified Small Business Stock (QSBS) Clarified
The capital gains exclusion remains in place, but with certain modifications. This may be valuable if you plan to sell part of a growing practice in the future.
Action Step: If a liquidity event is in your future, speak with a tax advisor about whether your shares may qualify under QSBS rules.
Other Administrative Changes
1099-K Threshold Increased
Starting in 2025, platforms like Venmo, PayPal, and Stripe will only issue 1099-Ks if you receive $20,000+ annually AND 200+ transactions.
Action Step: Separate business and personal payment accounts to avoid confusion — and unnecessary tax reporting.
Year-End Planning Opportunities
Here are several tax-smart moves to consider now:
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Purchase an electric vehicle before 9/30/25 to capture the final year of credits
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Install solar panels before 12/31/25 if you want the 30% residential energy credit
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Bunch charitable giving into 2025 before the new AGI floor takes effect
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Review AGI thresholds to ensure eligibility for deductions tied to income
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Evaluate your compensation and business structure for QBI optimization
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Consider increasing HSA and 529 contributions ahead of expanded uses
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Plan 2025 business investments to capture full bonus depreciation
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Amend 2022–2024 returns if you qualify for retroactive R&D deductions
Want Personalized Tax Planning?
The OBBBA opens the door to new deductions, expanded benefits, and some rapidly expiring credits. But many of the biggest tax advantages will only go to those who plan ahead.
Book a planning session now to review your specific opportunities and ensure your practice is positioned for tax savings in 2025 and beyond.
