When your clients use a vehicle for business, they may be able to deduct their mileage, but never as simple as entering a number and moving on. The IRS requires detailed records to support those deductions, especially if the return is audited. Whether your client uses the standard mileage rate or the actual expense method, you need to understand how to determine business use, meet substantiation requirements and recognize when luxury auto limits apply.

Below, you’ll find a few of the top questions and answers from a recent webinar on the topic. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As.

Q: If a taxpayer maintains a qualifying home office, is travel to a separate business location considered deductible business mileage?

A: Yes. If the home office qualifies as the taxpayer’s principal place of business under §280A(c)(1), travel from the residence to other business locations is deductible. This includes trips to client sites, suppliers or temporary work locations.

Q: Are travel expenses to multiple client locations deductible under the business use rules for a sole proprietor operating from a home office?

A: Yes. Such travel qualifies as business mileage if the home office is the principal place of business under §280A(c). These trips are considered business-related per IRS Pub. 463 and are deductible.

Q: Does an office physically attached to a taxpayer’s residence, with a dedicated client entrance and no access to the personal living space, qualify as a home office for tax purposes?

A: Likely yes, provided the space is used exclusively and regularly for business and meets the principal place of business test under §280A(c)(1). These characteristics support a qualifying home office deduction.

Q: Is mileage between two separate self-employment jobs deductible as business mileage for a self-employed taxpayer?

A: Yes. Per IRS Pub. 463 (Travel, Gift, and Car Expenses) and guidance in §162, travel between two business locations is generally deductible. However, commuting between a residence and the first/last job of the day is not.

To learn more about substantiating vehicle business use expenses, watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial.

The One Big Beautiful Bill Act (OBBBA) introduces sweeping business tax reforms beginning in 2025. From permanent expensing rules to updates on QBID and R&D, these changes reshape planning strategies for passthroughs, small corporations and self-employed taxpayers.

This Q&A covers the most pressing topics tax pros are already asking about, including the §179 expensing expansion, changes to bonus depreciation, the qualified business income deduction and what’s happening with R&D expensing.

Let’s look at what you need to know about the OBBBA tax changes 2025 for businesses.

What is the One Big Beautiful Bill Act?

Signed into law on July 4, 2025, OBBBA extends and enhances several key business provisions from the 2017 Tax Cuts and Jobs Act. Many expired or phasing-out deductions are now permanent or expanded, giving businesses more certainty. Most provisions take effect for tax years beginning in 2025.

What changes under OBBBA Section 179 expensing?

The OBBBA Section 179 expensing limit is now permanent at $2.5 million (up from $1 million), and the phaseout threshold has been raised to $5 million (up from $2.5 million).

• These amounts are indexed for inflation starting in 2026, using 2024 as the base year
• Applies to tangible personal property, off-the-shelf software and qualified improvements
• Vehicle limits still apply separately

These changes provide immediate expensing certainty for small businesses, eliminating year-end guesswork for clients purchasing equipment, furniture or software.

What’s the new rule for OBBA bonus depreciation?

Under the OBBBA bonus depreciation provision, the full 100% expensing is back, and has been made permanent.

• Applies to qualifying new and used property with a ≤ 20-year recovery period
• No phase-down through 2033
• Includes machinery, computer equipment and certain building improvements
• A transitional election allows 40% or 60% expensing in 2025 for certain property

The new permanent bonus depreciation will be a significant planning tool for businesses seeking to offset large income years.

Has the qualified business income deduction changed?

Yes, the OBBBA qualified business income deduction (QBID or §199A) is also expanded.

• The 20% passthrough deduction is now permanent (no more 2026 sunset)
• W-2 wage and UBIA limits still apply, but income thresholds are now indexed
• A new $400 minimum QBI deduction applies to active businesses with at least $1,000 in QBI
• More industries previously excluded as “specified service trades or businesses” (SSTBs) may now qualify (pending IRS guidance)

These updates offer long-term tax planning certainty for S corps, partnerships and sole proprietors, especially smaller businesses that may now benefit under the new income and participation thresholds.

What changed under OBBBA for QSBS?

Under OBBBA, qualified small business stock (QSBS) has become even more attractive to founders and investors. For QSBS acquired after July 4, 2025, taxpayers can now exclude

• 50% of gain after a three-year holding period
• 75% after four years
• 100% after five years

The per-issuer limit also increases to $15 million or 10× basis, whichever is greater, and will be indexed for inflation starting in 2026.

While these updates offer planning opportunities, the core requirements remain strict:

• Stock must be acquired at original issuance
• The business must be a C corporation under the asset threshold
• At least 80% of assets must be used in a qualified active business

Advisors should expect increased IRS scrutiny of QSBS claims.

What business green energy credits are ending?

OBBBA phases out nearly all major business green energy credits and deductions from prior law.

• Clean vehicle credits (including §§25E, 30D, and 45W) end for vehicles acquired after Sept. 30, 2025
• Deductions and credits for energy-efficient buildings, clean electricity, hydrogen, and advanced manufacturing (like §§179D, 45Y, 45X, and 48E) are also terminated or restricted between 2025 and 2027, and projects involving specified foreign entities are disqualified from remaining credits

Tax pros should advise clients pursuing green energy projects to re-evaluate timing, eligibility and ownership structure before assuming credits apply.

What’s changing for R&D expensing?

OBBBA restores the option to fully expense U.S.-based R&D costs immediately.

• Eliminates the unpopular 5-year amortization rule reinstated in 2022
  • Applies to costs incurred in the U.S. only
  • Foreign research costs must still be amortized over 15 years
• Available starting in 2025
• Software development qualifies
• Optional amortization is still allowed with a valid election

This change allows businesses (especially startups and manufacturers) faster tax savings and greater flexibility in funding innovation.

NATP is here to help you serve business clients with confidence

From OBBBA §179 expensing to bonus depreciation, the QBID and updates to R&D expensing, the OBBBA tax changes 2025 give your business clients fresh opportunities and new planning challenges.

As always, NATP will continue to support and guide you so you can explain changes clearly, file accurately and confidently lead your clients.

Watch for more NATP tools and webinars on OBBBA’s business impacts, and be ready for the busy season with the knowledge your clients count on.

You’ve likely encountered clients who assume they qualify as real estate professionals, but assumptions alone won’t hold up under IRS scrutiny. You must accurately determine who meets the material participation and hourly thresholds under §469.

With the right guidance, you can help clients implement grouping strategies, maintain proper documentation and make key elections to transform otherwise non-deductible passive losses into allowable deductions.

Below, you’ll find a few of the top questions and answers from a recent webinar on the topic. View the on-demand version of this webinar now for immediate access to the full recording and entire list of Q&As.

Q: What are the three tests to meet real estate professional status?

A: The taxpayer must (1) spend more than 50% of their personal service time in real property trades or businesses, (2) work more than 750 hours in those activities and (3) materially participate in each rental property, unless a grouping election is made.

For married filing jointly (MFJ) returns, you can’t combine both spouses’ time for the first two tests. However, once real estate professional status is established, both spouses’ time counts toward material participation.

Q: Is real estate professional status permanent once achieved?

A: No. Real estate professional status is determined annually. A taxpayer may qualify in one year but not the next if their facts or time commitments change.

Q: What activities count toward the 750-hour rule?

A: Only the time the taxpayer personally spends on real property trades or businesses counts. Qualifying activities include repairs, rent collection and property oversight. Time spent on passive investment activities, such as reviewing financial reports, doesn’t count.

Q: Do hired contractors’ or property managers’ hours help meet the “most hours” material participation test?

A: No. In fact, their hours count against the taxpayer in that test. To qualify, the taxpayer must show they spent more time on the activity than any other individual, including paid help.

To learn more about the tax considerations for real estate professionals, watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial.