The “One Big Beautiful Bill Act” (OBBBA), passed in early July, delivers sweeping tax reform for 2025 and beyond. For traders, investors, and pass-through businesses, the final bill locks in popular Tax Cuts and Jobs Act (TCJA) provisions while making permanent or extending critical tax breaks.
But OBBBA isn’t just about tax cuts — it’s also a balancing act. As lawmakers prioritize business relief, future trade-offs may emerge in the form of reduced social safety net spending. Let’s walk through what matters most tax-wise in the final version of the bill.
Trader And Pass-Through Provisions Get Locked In
Several key tax benefits are now permanent for traders eligible for trader tax status (TTS) business expense treatment, and electing Section 475 MTM ordinary trading gains and losses. TTS is a designation for traders whose activity qualifies them as a business under IRS rules.
- Excess Business Loss (EBL) Limitation under §461(l) is now permanent, no longer set to expire in 2028. In 2025, the thresholds are $313,000 (single) and $626,000 (married), indexed going forward. Losses above this cap become net operating losses (NOLs), which can offset income of any kind—rejecting prior proposals to limit them to business income only. TTS traders with business expenses and Section 475 ordinary losses have EBL qualified losses.
- Qualified Business Income (QBI) Deduction (§199A) is made permanent at the 20% level. This benefits pass-through entities like S-Corps, partnerships, and sole proprietors. For traders, the deduction includes Section 475 MTM income and expenses—but excludes capital gains, dividends, interest, and forex. Phaseouts apply to high earners in specified service businesses, including trading.
Bonus Depreciation And Software Write-Offs
- 100% Bonus Depreciation is fully restored and permanently extended for qualifying assets placed in service after January 19, 2025. This allows TTS traders and small businesses to write off equipment, computers, and off-the-shelf software.
- Section 179 expensing limits are increased to $2.5 million (with a $4 million phaseout), indexed for inflation.
- Internal-use software development is once again deductible in the year incurred under a new Section 174A. TTS traders who build custom algorithmic systems can deduct qualified development costs but off-the-shelf or third-party-developed platforms typically don’t qualify unless they are substantially customized by the trader. The trader must make trading decisions to qualify for TTS.
SALT Cap Relief And PTET Workaround Preserved
A major win: the SALT deduction cap increases to $40,000 for 2025, with a phase-out for modified AGI above $500,000. That amount rises modestly through 2029 before returning to $10,000 in 2030. However, it’s still disallowed for AMT purposes.
Meanwhile, the Pass-Through Entity Tax (PTET) workaround remains fully intact—including for Specified Service Trades or Businesses (SSTBs) like TTS trading entities. That means TTS traders in high-tax states (NY, CA, NJ, CT, etc.) can continue using entity-level SALT payments to reduce federal taxable income for regular tax and AMT.
Other Highlights For Traders And Investors
- Section 475 and Trader Tax Status (TTS) rules remain unchanged. Individual TTS traders had to elect Section 475 for 2025 by April 15, 2025, while partnerships and S-Corps had a March 15 deadline. The Form 3115 must still be filed with the 2025 return in 2026.
- Wash sale rules were untouched, and crypto remains exempt since it’s not classified as a security. This applies to investors and traders unless a TTS trader is using Section 475 MTM.
- No changes to Form 1099-B or crypto reporting. The new IRS Form 1099-DA for digital assets is still slated for 2026 implementation.
New Deductions For Seniors, Tips, And Overtime
Beyond trader-specific provisions, OBBBA introduces broader relief:
- Senior bonus deduction: $6,000 (single) or $12,000 (married) for those 65+, phased out at higher income levels.
- Tip income deduction: Up to $25,000 annually.
- Overtime deduction: Up to $12,500 (single) / $25,000 (joint).
- Auto loan interest: Deductible up to $10,000 for U.S.-assembled vehicles.
- Standard deduction: Increased to approximately $15,750 (single) / $31,500 (married).
- Child tax credit: Raised to $2,200 per child.
- QSBS exclusion: Increased from $10 million to $15 million.
- New “Trump Accounts”: Birth-based custodial investment accounts with tax-deferred growth.
The Bottom Line
The final 2025 tax bill shores up TCJA-era provisions that benefit TTS traders, investors, and entrepreneurs. With Section 475, QBI, PTET, and bonus depreciation secured, TTS traders can plan ahead with greater clarity. But not all taxpayers will benefit equally—and future policy debates may address how to fund these changes long term.
Related Posts from Robert A. Green, CPA
- OBBBA Trader Tax Update – Final July 4 Bill Secures Key Provisions for Traders and Investors. It’s a longer form version of this Forbes post.
- Final Tax Reform Bill Preserves SALT and PTET Deductions for Traders and Professionals
Sources: Senate OBBBA text; IRS QBI FAQ; RSM US; Gibson Dunn; Yeo & Yeo; KBKG; Forbes (Kelly Phillips Erb, July 2025).
Robert A. Green, CPA, is CEO of GreenTraderTax.com and author of Green’s 2025 Trader Tax Guide. He specializes in tax strategies for traders, investment funds, and self-employed professionals.