Basi, an attorney and CPA who has worked with the stone and surfaces industry for nearly three decades, outlined several provisions in the legislation that could reduce tax burdens for fabrication shops.

Qualified Business Income Deduction Made Permanent

The legislation makes permanent the Qualified Business Income (QBI) deduction, which allows pass-through entities such as sole proprietorships, S corporations and limited liability companies to deduct 20 percent of their business income. "If your company is making $100 of income or profits, you can deduct 20 percent and not pay tax," Basi said.

He noted that business owners who have been told they phased out of the QBI deduction due to high individual income may have options. Starting in 2026, the taxable income thresholds that reduce or eliminate the QBI deduction will increase.

Bonus Depreciation Returns to 100 Percent

The legislation extends bonus depreciation to 100 percent for property acquired and placed in service after January 19, 2025, allowing businesses to immediately deduct the full cost of qualifying equipment, machinery and business assets. Basi emphasized the importance of understanding the "placed in service" date rather than the purchase date when determining eligibility.

"Placed in service has all kinds of rules, and we have to look at when was the machine completed," he said. "Are you missing a part? Is something not working?"

Research Expenses Now Immediately Deductible

Domestic research and experimental expenditures incurred in tax years beginning after December 31, 2024, are now immediately deductible rather than spread over five years. "We used to have to spread it over five years, which would hurt our cash flow," Basi said. "We had to pay more tax on the profits because we didn't have the expense. We got this back."

The retroactive provisions allow small businesses with average annual gross receipts under $31 million that incurred research and experimental expenditures in 2022, 2023 or 2024 to amend those returns and claim the deductions. Larger businesses can elect to accelerate any remaining unamortized domestic research costs, deducting them either entirely in 2025 or spread over two years. Research conducted outside the U.S. must still be capitalized and depreciated over 15 years.

Section 179 Limits Increase

The Section 179 expensing amount increases to $2.5 million for tax years beginning after December 31, 2024, with the phase-out threshold beginning when property costs exceed $4 million.

Manufacturing Gets Additional Benefits

Qualified production property used in manufacturing qualifies for 100 percent first-year depreciation for facility investments and production equipment.

Opportunity Zone Provisions Renewed

The Qualified Opportunity Zone Fund program, which allows investors to defer capital gains taxes by investing in designated areas, has been renewed. "If you hold the money in there for 10 years or more and you don't take it out, all of the growth of the fund is now tax free," Basi said.

Businesses can create their own Opportunity Zone Funds to invest capital gains from the sale of equipment, stock, investments or entire businesses.

Basi encouraged fabricators to consult with tax professionals to determine which credits and deductions apply to their specific situations. "There's more in the tax bill than what we know," he said. "A lot of tax accountants will tell you, 'Well, it's black and white; it says this.' We have our tax bill, but then we have what we call treasury regulations. Those regulations are interpreting your tax code."