Corporate Tax Planning 2025
A strategic roadmap to the "One Big Beautiful Bill Act" (OBBBA): Leveraging permanent full expensing while navigating the Corporate AMT minefield.
Executive Summary
The 2025 tax year represents a seismic shift. The One Big Beautiful Bill Act (OBBBA) has permanently restored 100% Bonus Depreciation and immediate R&E Expensing (Section 174A), creating massive liquidity opportunities.
However, these benefits come with a catch: the Corporate Alternative Minimum Tax (CAMT). For large entities, aggressive tax deductions that lower "Regular Tax" do not reduce "Financial Statement Income," potentially triggering a 15% minimum tax that claws back the savings.
The Stimulus
The Floor
The Trap
Corporate AMT (CAMT)
The "Book-Tax" Trap
Who is an "Applicable Corporation"?
- General Rule: Average Annual Adjusted Financial Statement Income (AFSI) > $1 Billion (3-year avg).
- Foreign Parent: Group AFSI > $1 Billion AND U.S. Member AFSI > $100 Million.
- Safe Harbor: Interim Simplified Method (2025): Thresholds reduced to $800M / $80M using simpler math to prove non-applicability.
Restored Expensing (Bonus & R&E)
100% Bonus Depreciation
- Rate: Permanently restored to 100%.
- Straddle Trap: Assets acquired Jan 1 - Jan 19, 2025 get only 40%. Must be acquired after Jan 19th.
- Eligible: Machinery, Equipment, Vehicles, QIP (Interior Improvements).
R&E Expensing (Sec 174A)
- Domestic: Immediate 100% deduction (Effective 2025).
- Foreign: Must still capitalize over 15 years.
- Small Biz Relief: <$31M Gross Receipts? You can elect retroactive expensing for 2022-2024 via amended returns.
Interest Deduction (Sec 163(j))
Return to EBITDA
Leverage is unlocked again.
| Period | Base | Impact |
|---|---|---|
| 2022 - 2024 (TCJA) | EBIT | Strict limit. Depreciation hurts cap. |
| 2025+ (OBBBA) | EBITDA | Add back Dep/Amort. ~50% more debt capacity. |
State Divergence Matrix
States cannot afford the revenue loss from federal expensing. Expect massive "decoupling."
Rolling Conformity (e.g., NY, IL)
Usually adopt federal changes automatically. Watch out: Legislatures will likely pass bills to force add-backs of Bonus Depreciation.
Static Conformity (e.g., CA, TX)
Stuck in the past. CA typically does not conform to Bonus Depreciation or new R&E rules without specific action.
Interactive: CAMT Analyzer
Estimate your 2025 tax liability. See how aggressive expensing lowers Regular Tax but might trigger CAMT.
Financials (Millions $)
Must be >$1,000M to trigger generally.
100% Bonus + R&E Expensing amounts.