Middle-Market Tax Strategy Playbook: Making Sense of the “One Big Beautiful Bill”

Article | June 30, 2025

Authored by Your Firm LLC

When the House of Representatives narrowly approved the One Big Beautiful Bill earlier this spring, most of the attention went to partisan skirmishes and the bill’s sheer size. Yet for privately held companies across the country, the measure represents something more concrete: a sweeping reset of tax rules that could shape cash flow, capital investment, and succession planning for the rest of the decade.

“The permanence of the lower pass-through rates changes the calculus for entity selection, exit planning, and even ESOP feasibility,” said Robert, who leads the Tax Services practice at MBN & Company. “For two years, many owners stalled big decisions, waiting to see whether the 2017 provisions would evaporate. Now we have a runway.”

Runway is the right word. The legislation locks in a 21-percent corporate rate and a 23-percent Qualified Business Income deduction, both indefinite. It raises the estate-tax exemption to fifteen million dollars, indexed for inflation. And by switching Section 163(j) to an EBITDA standard through 2028, it restores the interest shield many companies lost just as borrowing costs spiked. For closely held manufacturers and service firms, the long-term contours of the tax landscape are suddenly visible again.

The bill also offers a short burst of kinetic energy. January 19, 2025 marks the start of a four-year window for full bonus depreciation. Domestic research and experimental spending becomes immediately deductible again through 2029, reversing the cash-draining amortization requirement that blindsided R&D-heavy businesses in 2022. Companies that mean to expand a plant, overhaul a tech stack, or launch a new product line may find the next few years unusually fertile ground.

Those incentives are not open-ended, however. To claim 100 percent bonus depreciation, equipment must be placed in service by December 31, 2028. R&D outlays enjoy the same deadline. In Robert’s view, timetables now carry tax weight. “If a client is negotiating a construction contract, the milestone schedule matters as much as the price,” he said. “A three-month delay can erase seven figures in present-value savings.”

At the individual level, the bill raises the cap on the state-and-local-tax deduction to forty thousand dollars, but only up to a half-million dollars of income for joint filers. That detail reshapes the value of pass-through entity-level SALT elections that swept the country in recent years. MBN’s multistate specialists have already begun rerunning waterfall analyses to determine whether those elections still pay dividends once the higher federal cap is in place and the Pease-style haircut on high earners takes effect.

Meanwhile, payroll and human-resources departments will have homework of their own. For tax years 2025 through 2028, tips and overtime pay become deductible for workers below a defined income ceiling. That sounds simple, but a deduction is only as good as the records that substantiate it. Employers will need systems that isolate and report those categories—preferably without adding friction to employees or the finance team.

On the balance sheet, immediate R&D expensing and the EBITDA-based interest limit may combine to lift free cash flow just when middle-market borrowers need relief. Some firms will refinance high-rate loans; others will pour the savings back into product development or acquisitions. Cost-segregation studies—often relegated to real-estate investors—could spread to operating companies eager to accelerate depreciation on newly constructed or renovated facilities.

MBN & Company has developed a five-step planning framework, beginning with scenario modeling that stretches through 2030 and ending with estate and succession synchronization. The firm’s practitioners argue that tax strategy now touches everything from Gantt charts for capital projects to shareholder-agreement clauses. “The breakpoints are clearer than they’ve been in years,” Robert observed, “but clarity only helps those who act before the window closes.”

Congress may tinker with the bill before it reaches the president’s desk, yet the broad direction seems set. Early movers will enjoy the lion’s share of the savings; latecomers will find the incentives gone by the end of the decade. For middle-market leaders, the message is less about politics and more about timing: the meter is running, and the opportunity is real.

To begin mapping your own playbook, contact Robert and the Tax Services team at MBN & Company. A strategic planning session now could preserve capital that fuels growth long after the legislative headlines fade.