This is the fourth in my series of tax updates to get my clients ready for their December Tax Planning Sessions. The One Big Beautiful Bill Act (OBBBA) changes discussed today include…
1 – The Sunsetting Green Energy Credits
The Inflation Reduction Act of 2022 enhanced green energy tax credits for individuals investing in renewable energy technologies. These credits were available to taxpayers who invested in renewable energy for their homes, their vehicles, and commercial properties.
The OBBBA repeals or phases out many of these credits beginning in late 2025.
• After September 30, 2025
Clean Vehicle Credit, Previously Owned Clean Vehicle Credit, and Qualified Commercial Clean Vehicles Credit
• After December 31, 2025
Energy-Efficient Home Improvement Credit, and the Residential Clean Energy Credits (e.g., solar panels, geothermal, battery storage)
• After June 30, 2026
Alternative Fuel Vehicle Refueling Property Credit, Energy-Efficient Commercial Building Deduction, New Energy-Efficient Home Credit
• Leased property provisions
The Clean Electricity Credit for leased residential property is repealed for taxable years beginning after 2025.
2 – Full Expensing Of Domestic Research And Experimental Expenditures
R&E expenditures are those incurred by a trade or business that “represent research and development costs in the experimental or laboratory sense.” To qualify for full expensing, the research or experimental activity must be conducted in the United States, Puerto Rico, or a U.S. Possession.
Taxpayers may fully expense domestic R&E in the year in which it was incurred, rather than depreciating these expenses as five year property, as was required in 2024.
3 – Business Meal Deductions
The OBBBA introduces targeted changes to the business meals deduction, primarily affecting employer-provided meals in specific industries and locations. A taxpayer may claim a 50% deduction for qualifying business-meal costs, provided each of the following conditions on the meal are satisfied.
• It’s ordinary and necessary, not lavish or extravagant. The cost must be reasonable considering the facts and circumstances and meet the “ordinary and necessary” standard.
• The taxpayer, or an employee of the taxpayer, must be present when the food or beverages are furnished.
• The meal must be directly connected to, or associated with, the active conduct of the taxpayer’s trade or business (e.g., a substantive business discussion occurs during, immediately before, or immediately after the meal).
• The food or beverages must be offered to a “business associate.” This includes current or prospective customers, clients, suppliers, employees, agents, partners, or professional advisers of the taxpayer.
Let me leave you with this…
For September 2025, the Personal Consumption Expenditures (PCE) price index rose 2.8% annually or 0.3% from the month prior. The Core PCE Price Index excluding food and energy, which is the Fed’s preferred measure, rose 2.8% annually or 0.2% month over month.
In other words. inflation went up again.
This is the last economic measure that the Federal Reserve Board will digest prior to its meeting next Tuesday and Wednesday where they will determine interest rates. As of this morning, traders are currently assigning an 85% to 90% chance that the Fed will reduce rates by a 1/4 point next week.
But this only tells a portion of the story.
The Wall Street Journal Dollar Index which is a broader measure of how the US Dollar is doing against foreign currencies was down again this morning. Since the beginning of this year, every dollar in your checking and savings accounts has lost over 6.5% of their buying power.
And given the Mar-A-Lago Accord, this trend will probably continue. Not only are prices going up, but your dollars have even less buying power.
It’s the original Double Whammy.
These combined factors go a long way to explain why so many middle class families are having difficulties in this economy.
Make your plans and set your prices accordingly. The business you save might be your own.
Before any of my friends on the far right or far left start writing me hate emails, please realize that this isn’t any sort of a political statement on what’s right, wrong, good, or bad. This is me providing the information entrepreneurs need for their businesses.
Please note that anyone sending me a hate email will be immediately deleted from this list.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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