This article is based on the recent Family Business webinar, “FAQs and Strategic Considerations: One Big Beautiful Bill.” Watch the replay here.
Few pieces of legislation have sparked as much curiosity in the family business community as the One Big Beautiful Bill Act (OBBBA). The sweeping tax package reshapes key provisions for privately held companies and their owners, presenting both opportunities and potential pitfalls.
To unpack the implications for family enterprises, Family Business Magazine spoke with Kathryn Stewart, director of tax strategies at Kreischer Miller, and Steven Staugaitis, director in charge of the firm’s small business advisory practice. Both work extensively with multigenerational family businesses navigating tax complexity, ownership transitions and long-term planning.
Extensions, Modifications and New Concepts
Staugaitis explained that the new law can be broken into three primary categories: extensions of existing rules, modifications of current law and new ideas entirely.
One of the most significant extenders from the Tax Cuts and Jobs Act is the qualified business income (QBI) deduction, a provision especially important for family businesses organized as pass-through entities. Originally introduced in 2017, the QBI deduction created parity between pass-through structures and traditional C-corporations. It had been set to expire at the end of 2025 but is now permanent under the OBBBA. Stewart says the extension keeps a key advantage of the previous QBI deduction intact. “The QBI allows the business owner to essentially have an effective tax rate on their pass-through income of 29.6% rather than the top rate of 37%,” she says.
Relief for Research and Development
The OBBBA also corrected what had become a costly frustration for many family firms: rules that forced companies to capitalize research and development expenses instead of deducting them immediately. Many of Kreischer Miller’s clients in manufacturing, distribution and technology had been feeling the pain of those limits, according to Staugaitis.
Stewart advises family businesses to review past tax filings, as some may qualify for retroactive deductions under certain thresholds. “Consider whether you meet the criteria for a small business taxpayer — you may be able to amend your 2022, 2023 and 2024 returns to claim those deductions,” Stewart explains. “We’re analyzing the cash flow impact of making amendments, but you also have the option to incorporate these adjustments prospectively in 2025 and 2026.”
Depreciation
Depreciation strategies remain a cornerstone of tax planning for capital-intensive family enterprises—especially with bonus depreciation restored to 100%. Stewart describes the provision as one of the most talked-about topics among clients. A key update in the OBBBA involves expanded deductions for non-residential real property used in manufacturing or production. “It cannot be office space,” Stewart explains.
Such changes, Staugaitis adds, highlight the bill’s broader aim of strategic flexibility.
Adjustments to the SALT Deduction
Another major talking point has been the state and local tax (SALT) deduction, which the Act raises from $10,000 to $40,000. But, as Stewart points out, most high-income families won’t see the full benefit. “You may have seen in the news, the state local tax deduction has gone up to $40,000,” she says. “Except — and there’s always an exception in tax — if your adjusted gross income is above $600,000. If you are a business owner and your adjusted gross income (AGI) is a combined $600,000 or more, you are still capped at that $10,000 state and local tax deduction on your personal return.”
Expanding Education Benefits
The bill also broadens education-related tax advantages. Among the most notable: expanded uses for 529 education savings plans. “One of the things that was added within the legislation was an expansion of some of the uses of the 529 plan,” Staugaitis says. The accounts can now fund more types of educational and vocational expenses, giving families greater flexibility in supporting younger generations. He also points out that the SECURE 2.0 Act allows for the conversion of unused 529 funds into Roth IRAs.
Stewart notes another boost: the maximum annual withdrawal for K-12 expenses will double, to $20,000, starting January 1, 2026.
Estate Planning: Higher Exemptions, More Time
On the estate front, the OBBBA provides both relief and opportunity. The anticipated reduction in the federal estate tax exemption has been delayed, keeping the individual threshold at $13.99 million — or $27.98 million for couples filing jointly — through 2025. Stewart notes, “The annual gift exclusion is $19,000 per individual,” allowing generous, tax-free transfers to multiple recipients each year.For business families with succession on the horizon, the window to act remains open — but not indefinitely. “Now is a good time to start revisiting some of those plans and start moving some of those assets around to the extent it makes some sense while these exemption levels are favorable,” Staugaitis says.
Strategic Takeaways for Family Enterprises
Overall, the OBBBA extends several beneficial provisions that had been on the verge of expiring, while layering in fresh incentives for investment, education and long-term estate strategy. But its complexity demands proactive attention, especially from families with intertwined personal and business interests.
Stewart emphasizes that certain provisions will shift again in the new year. For example, 2026 will bring new thresholds for charitable deductions.
Both advisors agree that the law’s many moving parts present a chance for reflection and recalibration. “Any time new tax legislation comes into play it does present some opportunities both for family businesses, for private companies, family business owners, to just step back and ask, ‘How does this apply to me?’” Staugaitis says.