With the passing of the One Big Beautiful Bill Act in July 2025, it has never been more critical to review updates and changes to the tax law. In this new monthly blog series, “Financial Blueprint: Wealth & Tax Strategies for Remodeling Businesses,” Traphagen CPAs & Wealth Advisors highlight important Individual, Estate, and Business tax provisions under the Act. If there is one thing we all know, it’s that the tax landscape constantly changes, so what does that mean for you?
On an individual basis:
Federal marginal tax rates used to determine your tax liability, ranging from 10% to 37%, have been made permanent. Simply put, the more you earn, the more tax you pay. This can ease any uncertainty for planning purposes, especially if some of your projects have been accelerated this year or deferred to the following year.
The $750,000 principal limit for the mortgage interest deduction has been made permanent. If the principal balance of the mortgage is $750,000 or less, calculated on an average basis from January to December, interest paid can be included in your itemized deduction calculation. If you or someone you know took out a Home Equity Line of Credit and used those funds to substantially improve the home, that interest can also be included in the overall itemized deduction calculation to see if any of that is deductible.
A huge area of concern under the prior tax law was a temporary increase to the cap on the itemized deduction for state and local taxes (SALT) from $10,000 to $40,000, depending on your income level. As it currently states, this cap will revert to $10,000 after 2029. SALT includes property taxes, and then you pick either state sales taxes (keep those receipts!) or state income taxes to calculate how much you may deduct based on your income.
No tax on overtime? Well, it depends. Qualified overtime compensation is compensation paid pursuant to Section 7 of the Fair Labor Standards Act of 1938 that is in excess of the employee’s regular compensation rate. If applicable, taxpayers may deduct up to $12,500 ($25,000 for joint filers)!
Before we get into business provisions, our new tax law permanently raises the federal estate, gift, and generation-skipping transfer (GST) tax basic exclusion to $15 million per individual, with indexes for inflation annually.
For business owners:
Changes in depreciation? Yes! A major tax benefit for real estate investors and business owners is the ability to deduct depreciation expense on buildings and other fixed assets. Bonus Depreciation, one type of tax depreciation, is now back to a 100% allowance for property placed into service on or after January 19, 2025.
The work you do for businesses may be subject to Bonus Depreciation rules, giving your clients a greater tax deduction on applicable property!
Something brand new to the tax law is a special depreciation allowance for “Qualified Production Property”. This new type of property provides for a 100% first-year depreciation deduction on certain nonresidential real property used in a qualified production activity. The eligibility of this property is still subject to updates and guidance from the IRS, so we will present what we know about this so far.
The Qualified Business Income Deduction (QBI) is now permanent! A key fixture of the prior tax law, this QBI deduction is here to stay. Also known as the 20% deduction, this keeps more money in your pocket to use for your business or for yourself if maximized. We will discuss eligible entities and tests used to calculate any applicable deduction.
The One Big Beautiful Bill Act brought about tax law updates, changes, and new additions that impact all taxpayers. It is important for you to know what affects your business and personal tax situation. We highlighted a few areas and just a snippet of information found in hundreds upon hundreds of pages in what is known in our industry as OBBBA. For your industry, you and your clients indirectly play a role in applying the tax code based on projects performed, so the more you know, the better off you will be.
About Traphagen CPAs & Wealth Advisors
Celebrating over 55 years, Traphagen CPAs & Wealth Advisors is a dynamic leader in its community, providing a full range of comprehensive accounting, tax, and wealth management services. Unlike traditional financial advisory firms, our accounting team specializes in advisory services in tax strategies, financial reporting, assurance, mergers, and acquisitions.
Our wealth team manages investment assets and provides comprehensive, holistic fee-only advisory services in financial planning, portfolio management, estate, and trust planning, as well as wealth transfer strategies. As fee-only advisors, we always act as a fiduciary to our clients.
As Certified Public Accountants and Registered Investment Advisors, we are uniquely positioned to be your trusted financial advisors. Traphagen advisors combine the value of their individual credentials to achieve a comprehensive view of your business and personal goals.
For contractors and remodelers, moving heavy appliances is an unavoidable part of the job. Refrigerators, ovens, washers, and similar loads often weigh hundreds of pounds, and without the right approach, they can quickly become a source of risk for both workers and clients.
Kitchen remodels are complex, high-stakes projects—and clients expect a seamless, personalized experience. Sub-Zero, Wolf, and Cove showrooms are designed to help you deliver just that. More than just a product display, our showrooms serve as a strategic partner in your remodeling process.
For years, residential remodelers have relied on manual methods to run their businesses. But with tighter margins and tougher competition, managing your business on whiteboards, paper, and spreadsheets can be a major liability.