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Member of Russell Bedford International, a global network of independent professional service firms.
CPA | Senior Tax Accountant
As you know, the President signed the One Big Beautiful Bill Act on July 4, 2025. This brought significant changes in the areas of depreciation and related deductions that will impact your taxes in 2025 and beyond.
Below we’ll summarize the most important depreciation changes under OBBBA, including bonus depreciation, Section 179 expensing and a new 100% depreciation election for certain real property.
Note: For a more comprehensive overview of bonus depreciation and section 179, see our previous blog post on the topic here.
Bonus depreciation allows businesses to deduct a large portion or all of the cost of assets in the year they’re purchased.
Key Details:
The Section 179 deduction allows businesses to immediately expense the full cost of qualifying assets purchased, subject to annual limits.
OBBA Changes:
OBBBA introduces a new 100% deduction for qualifying real property used in production facilities that produce qualified tangible personal property (TPP).
Application of this provision will be complex and IRS guidance will need to be issued. In short, if a taxpayer produces tangible goods and begins building a new manufacturing facility after January 20, 2025, then 100% of the cost of the portion of that facility dedicated to manufacturing can be deducted in the first year.
Key Details:
The IRS is expected to issue guidance and clarifications on these provisions, which could take months. While we usually start looking at year-end tax planning in Q4, now is the time to talk with your advisor about the impact of the bill on your specific situation. In particular, you may be able to reduce planned tax payments for the remainder of 2025 given the benefits you’ll see in the bill. At Cray Kaiser we’re here to help you understand how these changes may affect your business and ensure you make the most of these new depreciation opportunities. Contact us here or call us at 630.953.4900.
In this video, Brian Kot, a Principal at CK, shares valuable insights into the most common questions clients ask about tax planning, document retention, business sales and financial reporting. From strategies to reduce your tax liability and organize your financial records to best practices when selling your business and improving accounting processes, Brian highlights the importance of proactive planning and collaboration with your CPA.
Transcript
My name is Brian Kot and I am a principal with Cray Kaiser Ltd. I’m often asked by my clients, “How can I reduce my tax liability?” The answer to this question comes with a lot of strategic planning between the client and your CPA. You want to at least minimally have an annual meeting with your CPA to discuss your tax situation and your financial planning on what’s going on with your business.
There are many suggestions typically that are offered such as contributing to an IRA or a sub-contribution or vehicle expenses might be missed or maximizing the depreciation deductions and purchasing certain assets within your business. In that conversation, it’s also very important to discuss the current tax rates and future tax planning. For example, you may want to try to defer income, or you might want to accelerate certain income to maximize current tax rates that are in effect today, for example, the capital gains tax rate. So having an effective meeting with your CPA in discussing these strategies is the optimal way of reducing your taxes, and it’s different between each individual and organization.
I’m often asked how long should I keep my documents for, especially in this age of digital world. The answer depends on the type of organization and also the type of documents that we’re discussing. Some documents you need to keep indefinitely, such as your corporate resolutions, your bylaws, your tax returns, your financial statements. We should always keep those forever and never destroy those and keep them in a digital format. There are other documents such as a lot of payroll documents need to be kept for a minimum of seven years and then there’s other documents especially on the individual side that you only need to keep for only three years and it also depends on the statute of limitations on how long you need to keep these documents for. I definitely recommend you check out our website if you click on the resource tab and search document retention. We have a guide that explains and gives an example of what documents you should keep either indefinitely or for seven years and remember that’s just a guide but it can be used as a rule of thumb.
You’re considering selling your business and often I’m asked how much do I owe in taxes? That’s a very challenging question to answer right off the bat, and a lot of planning needs to go involved. The first thing is to determine the market value of your business. And we recommend that you use an outside third party to assist you in determining the market value. Once the market value is determined, the way that the deal is structured and the sale is put together will significantly have an impact on how much you will pay in taxes, along with your personal tax situation. So we recommend before you, at any time, sign any agreement or sell your business. You consult with your tax advisor to go over that agreement in detail to determine if it is the most cost and tax efficient way for you to sell your business. Too often, we hear after the fact that our clients may have sold their business, or for that matter, entered into any type of a transaction. And if you would have consulted your tax advisor before entering that transaction, you may have saved a significant amount of taxes, as the transaction could have been structured differently.
Often, my clients will ask me, “How can I improve my financial reporting or get more timely reports, or I’ve lost my accountant, what do I do?” Here at Cray Kaiser, we have a dedicated team to assist you in your financial reporting. If you use a software such as QuickBooks or similar to QuickBooks, we can offer training on the program to ensure your employees properly know how to use the software. And we can also offer customization and create customized reports to help you understand your business. Having timely and accurate financial information available to you will enable you to make business decisions and help you grow your business.
Please consult a member of Cray Kaiser to understand the benefits that we can offer your organization to help you improve your financial reporting. Please review our website at craykaiser.com as we recently launched our Client Accounting Advisory Services webpage. You can find more information there and you can contact a member of our team at 630-953-4900.
CPA | Senior Tax Accountant
The One Big Beautiful Bill Act was signed into law on July 4th, introducing significant tax changes that could directly affect your 2025 tax return. Two key deductions that you will want to take advantage of starting in 2025 are the new interest deduction on auto loans, and the increased state and local tax (SALT) deduction. Below we break down exactly how each deduction works, who qualifies and how they may impact your overall tax strategy.
Beginning January 1, 2025, individual taxpayers may deduct up to $10,000 of interest paid on qualifying auto loans.
To be eligible for this deduction, autos must:
This deduction does not apply to:
The deduction phases out for taxpayers with:
Phaseout formula: The $10,000 maximum deduction is reduced by 20% of the amount your income exceeds the applicable modified AGI.
Example:
If you are single and have a modified AGI of $120,000, you exceed the threshold by $20,000.
For tax years beginning after December 31, 2024, the SALT deduction cap increases from $10,000 to $40,000 for individual taxpayers who itemize.
Full deduction applies if your modified AGI is below:
Beginning in 2026, the cap will increase by 1% annually through 2029. The $40,000 maximum deduction is reduced by 30% of the amount your income exceeds the applicable modified AGI.
Example:
A couple filing jointly with a modified AGI in 2025 of $510,000 exceeds the limit by $10,000.
This deduction will return to a $10,000 limitation in 2030.
Many states have introduced Passthrough Entity Tax (PTET) credits to bypass the old $10,000 SALT cap. With the cap now higher, states may reconsider their PTET policies, potentially impacting how your state taxes are calculated if you own a partnership or S-corporation.
If you have questions about these new deductions or any of the provisions in the OBBB Act, the team at Cray Kaiser is ready to help you understand the potential impact on your personal or business taxes. You can contact us here or call us at (630) 953-4900.
CPA | Tax Manager
As we highlighted in a previous blog, beginning September 30, 2025, the U.S. Treasury will stop issuing paper checks for most federal payments, including Social Security, Veterans Affairs benefits, and federal tax refunds. Instead, payments will be made electronically, usually by direct deposit into your bank account.
This change stems from Executive Order no. 14247, “Modernizing Payments to and From America’s Bank Account,” signed by President Trump in July, 2025. The government explained that the move is designed to reduce fraud, prevent lost or stolen checks, and deliver funds faster.
If you already receive payments electronically, no action is needed. However, if you still receive paper checks, you must switch to direct deposit before the deadline.
Here are 6 ways to enroll in direct deposit:
You can read the Treasury’s full announcement here.
Most taxpayers already use electronic payment methods, but if you haven’t transitioned, now is the time to act.
This change is part of a larger plan. In the future, the government will also require payments to the federal government, like income taxes, to be made electronically. For now, paper checks for payments such as the September 15, 2025, estimated tax payment are still accepted, however, expect changes in the near future.
At CK, we recommend using electronic methods whenever possible for both filings and payments. Benefits include:
If you’re not sure how to make the switch, reach out to your CK team for help with transitioning your tax payments, refunds, and estimates to secure electronic systems.
As accountants, we know that unresolved tax liabilities can lead to escalating penalties and interest but the Illinois Department of Revenue is offering a rare opportunity for a clean slate. Effective soon, the 2025 Illinois Tax Delinquency Amnesty Act provides a window for eligible taxpayers to settle outstanding state tax debts and wipe away associated penalties and interest.
Per bulletin FY 2026‑01, the Illinois Tax Delinquency Amnesty Act allows eligible taxpayers to pay overdue state tax liabilities without incurring penalties or interest, as long as they settle in full during the amnesty window.
Individuals and businesses with unpaid liabilities for state taxes administered by the Illinois Department of Revenue during the eligible period qualify for the amnesty program.
1. File any missing returns or amend incorrect filings for the eligible periods. Include any supporting documentation.
2. Pay the full tax amount due during the amnesty window (Oct. 1 – Nov. 17, 2025).
3. If your liability has already been referred to a private collection agency, you must pay through that agency, do not pay IDOR directly.
4. Use MyTax Illinois for convenient payment but if you need an account, request a Letter ID, which may take up to 10 days to receive. If your account isn’t ready by November 17, you’ll need an alternative payment method.
Tax liabilities can quietly compound. What might begin as a modest underpayment can balloon with added penalties, interest, and collection costs. This amnesty program offers relief: an opportunity to settle past issues cleanly and efficiently.
If you’re unsure whether you qualify or how to rectify your filings, now is a great time to reach out. At Cray Kaiser, we’re here to help guide you step by step. Contact us to discuss how the Illinois Announces Tax Amnesty Program may impact your tax situation.
MSA, MST | Assurance In-Charge
On July 4, 2025, President Trump signed the “One Big Beautiful Bill” Act into law, introducing one of the most talked-about provisions: Trump Accounts. This new type of tax deferred account aims to help children in the U.S. build long-term wealth from birth into adulthood.
A Trump Account is a federally created tax-deferred investment account designed to give children a financial head start through both government contributions and private investments.
Qualified withdrawals (Allowed starting at age 18)
Taxation & Penalties
Many details will be clarified through future regulations, including IRS interpretations. Even though year-end tax planning usually begins in Q4, now is the ideal time to talk to your tax advisor and evaluate whether a Trump Account makes sense for your family.
At Cray Kaiser, we’re here to help you navigate the One Big Beautiful Bill Act and plan not just for this year, but for the years ahead. Contact us to discuss how these new rules could impact your tax and financial future.
CPA | Tax Manager
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, bringing sweeping changes to federal tax provisions. While much attention has been focused on electric vehicle (EV) tax credits, the legislation also includes a wide range of energy-related tax incentives that could impact both individuals and businesses.
If you want to take advantage of these benefits, timing will be critical, many of these provisions have short windows before they expire. Here’s what’s changing and what you should be doing now to prepare.
The One Big Beautiful Bill Act includes several incentives designed to encourage the adoption of clean energy solutions in homes and vehicles. However, these credits are set to expire soon:
Businesses will also see notable changes to clean energy incentives, some ending soon, others phasing out gradually:
While many details are still pending clarification through regulations, here’s how you can stay ahead:
At Cray Kaiser, we’re here to help you navigate these changes and plan not just for this year, but for the years ahead. Contact us to discuss how the One Big Beautiful Bill may impact your tax situation.
MSA, MST | Assurance In-Charge
The One Big Beautiful Bill Act (OBBB) introduces significant updates to Section 174A, which governs the treatment of research and experimentation (R&E) expenses. These changes aim to boost domestic innovation in the United States by modifying how businesses can deduct and capitalize R&E costs. Whether you’re a startup investing in cutting-edge technology or an established company developing improved products or processes, the new Section 174A rules bring welcome opportunities for immediate tax savings and improved cash flow.
Historically, Section 174 of the Internal Revenue Code (IRC) permitted businesses to immediately deduct all R&E expenditures. However, the Tax Cuts and Jobs Act of 2017 (TCJA) removed this option and required taxpayers to capitalize R&E expenditures and amortize them over a five-year period for R&E performed within the United States, or a fifteen-year period for R&E performed outside the United States for tax years beginning after December 31, 2021.
New Code Section 174A restores the taxpayer’s option to immediately deduct domestic R&E expenditures incurred in connection with a trade or business for work performed in the U.S. This applies to tax years beginning after December 31, 2024. Taxpayers may still make the election to amortize R&D costs over a 5-year period or ratably over a 10-year period for certain Section 174A expenditures.
Under the OBBB, eligible small businesses, those with less than $31 million in average gross receipts over the past three tax years, receive expanded benefits:
The OBBB Act does not modify rules for foreign R&E expenditures. These costs must continue to be capitalized and amortized over a fifteen-year period.
The restoration of full expensing for domestic R&E expenditures represents a major win for U.S. businesses. Your company has the opportunity to gain greater control over cash flow, improved tax planning, and increased investment capacity. However, the decision to expense immediately or amortize isn’t one-size-fits-all. Fully capitalizing on the new law requires thoughtful evaluation of available elections and possible changes to accounting methods. Factors such as refund timing, IRS processing risks, state tax conformity, and ownership changes must all be considered. Our team at Cray Kaiser is closely monitoring IRS guidance on these changes.
If your business invests in research and development, these changes could have a major impact on your tax strategy. To learn how these provisions apply to your specific situation, contact your trusted advisors at Cray Kaiser.
International tax law is undergoing some significant changes. Under the One Big Beautiful Bill Act (O3B), new rules like the U.S. remittance tax and updated controlled foreign corporation provisions will reshape how individuals and businesses handle cross-border transactions. In this audio blog, we break down the major updates, explain their potential impact and share strategies to help you stay compliant.
Transcript:
Welcome everyone to this edition of CK Thought Leadership. My name is Eric Challenger. I’m a tax manager here at Cray Kaiser and I’m joined by Damian Contreras.
Hi everyone. As Eric said, my name is Damian Contreras. I’m a tax senior at Cray Kaiser. I’ve been here for a little over three years and started as an intern.
Today we are diving into some major updates to international tax regulations recently enacted under the One Big Beautiful Bill Act, also known as O3B. We’ll cover the new remittance tax, explain what a controlled foreign corporation is, go over the changes to guilty, and wrap up with some important foreign reporting reminders. Let’s kick things off with a new and intriguing remittance tax. Damian, can you walk us through this piece of legislation and what it means?
Absolutely, Eric. The remittance tax, while new in the U.S. effective January 1st, 2026, isn’t entirely new globally. Several other countries already have similar systems in place. Let’s focus on how this will work in the U.S. Remittance tax is a 1% tax on funds sent out of the U.S. for non-commercial purposes, that is personal, not business-related transfers. The sender is responsible for the tax unless an exemption applies to them. The facilitator of the transfer, common groups are Western Union, PayPal, or money orders sent, is responsible for collecting and remitting the tax to the U.S. Treasury on a quarterly basis. If the facilitator fails to collect the tax, they’re still liable for the taxes due. The tax applies to cash transfers and cash equivalence exceeding $15. Notably, cryptocurrency transactions and transfers are currently excluded from this tax. So what qualifies for an exemption? Transfers funded by a US-issued debit or credit card or transfers withdrawn from an account held in an institution subject to the Bank Security Act. While we’re talking about new international tax provisions, what’s happening to the old ones? I saw there were changes to GILTI now renamed net CFC tested income taking effect in 2026. Can you first explain what a CFC is and then we could dive deeper into what’s changing?
Yeah, this is a big update. Let’s start with the basics. A controlled foreign corporation CFC is a foreign corporation that is more than 50% owned by U.S. shareholders which may include corporations and individuals. U.S. shareholders who own at least 10% of a CFC are required to report their share of the NCTI, previously known as GILTI, on their annual tax returns. These rules primarily impact U.S. multinational corporations and individuals with substantial foreign investments. So even if you’re not a big business, it’s something to be aware of if you’re planning to invest abroad.
Eric, now that we understand what a CFC is and what exactly GILTI, you know, net CFC tested income is under the new law, what’s changing?
Great question. The GILTI provisions were introduced under the 2017 Tax Cuts and Jobs Act to discourage U.S. companies from shifting profits offshore and avoiding U.S. taxation. GILTI imposed a minimum tax on profits from CFCs regardless of whether those profits were brought back to the U.S. Under O3B Act, these rules are being tightened significantly. Key changes include country-by-country calculation of GILTI, now NCTI. Previously, companies could offset low tax income with high tax income across countries. That’s no longer allowed, which increases the exposure for low-tax jurisdictions. The qualified business asset investment deduction is being phased out and eliminated. The foreign derived intangible income FD2 deduction is being reduced. Formally 50%, it’s now 37.5% which raises the effective tax rate from 10.5% to 13.125%. The high tax exception threshold is increasing from 18.9% to 21%, aligning it with the U.S. corporate tax rate. One piece of slight relief, the foreign tax credit limitation is being loosened from 80% to 90%. Originally the cut was 80%, but now it’s going to be reduced to 90%, meaning that taxpayers can now use more of their eligible foreign taxes to offset U.S. taxes. Bottom line, the overall U.S. tax burden on CFC income is going up, and affected shareholders will start to feel this on their returns beginning in 2026.
Now that’s a lot to digest. What advice do you have for multinational corporations or individuals who may be impacted by these changes?
As these changes are implemented over the next year, it’s critical that both multinational corporations and individuals work closely with their tax advisors. Strategic planning now can help minimize exposure under the new NCTI framework and ensure compliance moving forward.
Absolutely. On that note, let’s not forget the penalties. Failing to comply with foreign tax reporting rules can be very costly. Penalties start at $10,000 per violation and can add up quickly. And it’s not just Guilty that we’re talking about. These penalties apply to the F-bar, foreign bank account reporting, foreign financial asset reporting, and needed CFC disclosures. So if you even think you might have an international reporting obligation, reach out to your advisor. Don’t risk non-compliance in this fast-evolving tax environment.
Well, thanks for tuning in to the CK Audio Blog on International Tax Changes under O3B. For more information on how these updates may affect your business or personal tax situation, visit us at www.craykaiser.com or give us a call at 630-953-4900.
In this episode, Karen Snodgrass, one of our tax partners, breaks down the major business tax changes introduced by the newly passed One Big Beautiful Bill Act. From the return of 100% bonus depreciation and expanded Section 179 expensing to new R&D expensing rules and the phasing out of clean energy credits, Karen explains what these updates mean for your business in 2025 and beyond. If you’re a business owner or financial decision-maker, tune in for practical insights on planning, compliance and maximizing the bill’s benefits.
Transcript:
My name is Karen Snodgrass. I’m a tax partner with Cray Kaiser Ltd. As you know, the president signed the One Big Beautiful Bill over the July 4th weekend. There’s a lot of change here that we’re going to unpack, and really today we’re going to focus on the business provisions. And these are going to affect your taxes in both 2025 and over the next several years.
If you’re a business owner, you’re used to the benefits of bonus depreciation, but you’re also used to the reduced benefits we’ve had over the years. Before this bill, 2025 bonus depreciation was down to 40%. A significant win for business owners is we’re now back to 100% bonus depreciation. This is only effective on purchases made after January 19th of 2025. It’s a weird cutoff date, but purchases before January 20th, they’re still required to use 40% bonus. Even better news is this 100% bonus depreciation does not sunset, meaning future administrations may change this, but for now it’s a permanent provision that won’t be reduced below that 100%.
A significant change in the law related to bonus depreciation is a new class of qualified assets. Real property being referred to as “qualified production property” is now eligible for bonus depreciation. So, what does this mean? Think of a building that is used in manufacturing or a production process. The property related to the actual production would qualify, not necessarily attached offices or other non-production space. These properties must have a construction period between January 20, 2025 and the end of 2029. Given this is an entirely new provision, we’re going to need to wait for more clarity on this. We expect regulations will be issued to address a number of questions we have. It seems a cost segregation study will be needed if a client wishes to claim this deduction. With such a study, an architect or an engineer is going to be able to look at the building and parse out exactly what will qualify for the 100% bonus depreciation.
Another pro-tax provision related to capital acquisitions is expanded section 179. Like bonus depreciation, Section 179 allows for the immediate write-off of qualified property. The 2025 limitation on Section 179 is now increased to a whopping $2 and 1/2 million in property that can be expensed. As long as certain income qualifications are met. The phaseouton eligibility applies after four million has been acquired in any given year and they’re going to keep adjusting these limitations for inflation going forward. Once again these are provisions that look to be permanent.
But let’s talk about why someone may claim Section 179 versus bonus depreciation. I mean really they’re both immediate write-offs, what’s the difference, right? It’s important to note that some states don’t follow bonus depreciation, but they do conform to federal Section 179. So depending on the state, it may be more beneficial to claim Section 179. We recommend working with your tax advisor to ensure the maximum tax benefit for your cut-backs costs.
Our top question so far is about one of the few retroactive changes in the bill. Businesses that perform a significant amount of research and development activities, or R&D, were surprised with somewhat recent legislation that curtailed the deduction of these costs. This started in tax years beginning after December 31, 2021. Taxpayers were required to capitalize and amortize R&D costs over a five-year period for domestic costs and over an even longer 15-year period for any costs that were incurred internationally. That was quite the change from the immediate expensing that we enjoyed in prior years. What we found was that the benefit of the R&D credit was not sufficient to cover the additional tax due from not being able to write off these costs. The popular argument was that this policy actually harmed American taxpayers. The new bill actually creates a whole new code section, section 174A, which partially restores expensing of R&D costs. Domestic research costs are now fully deductible, but foreign R&D costs are still being advertised over 15 years. And this applies to tax years beginning after December 2024. But here, we need to talk through two different tax treatments based on your company’s size. Let’s start with what the IRS calls small taxpayers. These businesses have average annual gross receipts of $31 million or less. The bill actually allows these businesses to retroactively apply full R&D expensing for domestic costs to tax years beginning after December 31st, 2021, by amending prior returns. Or they can elect to continue to amortize these costs in 2024 and then expense the remaining domestic costs that haven’t been written off in either 2025 or 2026.
We’ll dive deeper into that in a little bit with an example. But let’s not forget about the larger businesses. Unfortunately, they don’t get the same retroactive treatment. However, they can elect to accelerate the remaining amortization over one or two tax years beginning in 2025. But let’s go back to the small taxpayers. And here we’ve actually walked through a case study with a client of ours that was considering do they use the retroactive R&D treatment or not. So what we did was we did our own study. What we found was that in 2022 we’ll definitely be able to decrease taxable income if we choose to immediately expense R&D. Now, in order to do that, the business is going to have to amend their 2022 return and, because this is an S-Corporation, all the owners are going to have to amend their 2022 returns as well. There’s a compliance cost associated with this and that needs to be measured against the refunds to be received. Fast forward to 2023. While, again, we’re going to be able to claim all those 2023 costs immediately. We actually lost the benefit of the amortization of the 2022 costs. And in this client’s case, 2023 taxable income is actually increased by applying these rules retroactively and the same holds true for 2024. Although it’s not the tax result we wanted in 2023 and 2024, once you make the election to apply the retroactive treatment, you still need to go through the process of amending all the business and owner returns for 2022 through 2024. So we had to weigh the benefit of the 2022 refund against additional tax in 2023 and 2024. Also, you have to think about the compliance costs. What’s it going to cost to amend all of these tax returns? And finally, let’s keep in mind the IRS has cut their staff by roughly 30%. We’re all used to waiting for our refunds, and that’s not going to change. We came to the conclusion with our client, we are not going to amend the prior returns. We’re not going to use the retroactive treatment even though it meant a better result in one tax year. Instead, we’re going to utilize the remaining deductions into ‘25. What we’ll be able to do is get cash flow benefit immediately. We’re going to reduce their quarterly tax payments due in September of this year. It’s a thoughtful easy button approach in this case.
We should talk through some other changes that will affect businesses. Clean energy credits appear to be on the chopping block. The bill eliminated some of these credits, too much to get into detail and to hear. But the president has already said he’s going to revisit this and perhaps further reduce the availability of clean energy credits.
Businesses that have had limitations on their deduction of business interest got a win under this bill. The computation of allowable expense has been expanded in a pro-tax pair away. And really, these are just the highlights. What are we recommending you do now? We know there’s a lot of clarifications needed on the bill. These are going to come in the form of regulations that may not be issued for months. There’s also rumbles of corrections to this bill. But at least we can see the direction of the congressional intent. While we usually start looking at year-end tax planning in the fourth quarter, now is really the time to talk with your advisor about the impacts of the bill on your specific situation. In particular, you may be able to reduce planned payments for the remainder of 2025, given the benefits you’ll see in this bill. As always, you can contact your advisor, Cray Kaiser, and we’ll be happy to walk through the situation and how it may affect you.
