The “One Big, Beautiful Bill” (OBBB) signed into law on July 4, 2025 introduced a wide range of changes, but only some of them apply to your private practice’s tax credits and deductions.

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Still, by taking advantage of the credits and deductions the OBBB did change, you can potentially realize major tax savings for your business. Here are the most significant changes to look out for.

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More credits for providing employee benefits

With the signing into law of the OBBB, the Employer Childcare Credit rose from 25%, with a $150,000 limit, to 40% with a $500,000 limit. (The limit is 50% and $600,000, respectively, for qualifying small businesses.)

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If you already provide or subsidize childcare for employees at your private practice, you can plan on a bigger tax credit in 2025. And if you don’t offer childcare benefits, the OBBB has now made it more affordable to do so.

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The OBBB also modified the Paid Medical and Family Leave (PMFL) credit. Starting in 2025, you can receive a larger credit for providing your employees with this benefit. 

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The PMFL credit was previously based only on the wages you paid an employee during their leave. Now it is also based on any insurance premiums you pay for your employee while they are away.

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The standard deduction increases

The OBBB increased the standard deduction for individual filers from $15,000 to $15,750, indexed for inflation.

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While it isn’t a huge jump, this increase still has the potential to lower your tax bill. Now is a good time to review your method of claiming above-the-line writeoffs. If itemizing your deductions has provided a small amount of savings, you may now be able to save yourself the trouble of itemizing and get comparable savings from the standard deduction.

The SALT cap increases

The SALT deduction is an above-the-line tax writeoff. It allows individuals to deduct the cost of state and local taxes on their federal tax return. If you are based in a state with high taxes, claiming the SALT deduction can significantly reduce your tax burden. 

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From 2017 to 2025, the SALT deduction cap was $10,000. (The $10,000 cap was introduced by the Tax Cuts and Jobs Act (TCJA) in 2017, prior to which there was no cap.)

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Now, the OBBB raised the SALT deduction cap to $40,000. After the 2029 tax year, the cap will return to $10,000.

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So, for the next several years, you can claim a larger portion of your state and local taxes on your federal return. Just be sure to keep the 2029 deadline in mind, and adjust your tax strategy accordingly. 

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Protection for the Pass-Through Entity Tax (PTET)

Related to the SALT deduction, the PTET allows qualifying businesses in certain states to claim state taxes on their federal returns in excess of the SALT cap.

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Some background: After the $10,000 cap was introduced in 2017, many states implemented PTET. This tax serves as a means for qualifying businesses to claim deductions in excess of $10,000. 

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Businesses can elect to pay PTET directly, rather than having their shareholders or partners claim portions of the SALT deduction on their personal returns. Then, the business entity claims PTET a business deduction, distinct from the SALT deduction, on their tax returns.

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So far, over 30 states have implemented PTET. However, until 2025, there was some risk to taxpayers taking advantage of PTET. The federal government was in a position to bring legal action against PTET and disallow the deduction.

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The OBBB introduced guaranteed protection of PTET from federal interference. So, if you would like to increase your deductions, you can rest easy knowing that the PTET workaround is a safe bet. 

Increases to the Section 179 deduction and bonus depreciation

By taking the Section 179 deduction or electing bonus depreciation, you can write off the entire amount of a large purchase in the year you make it, rather than depreciating it over subsequent years.

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With the passing of the OBBB, the limit on the Section 179 deduction has been raised from $1.25 million to $2.5 million.

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Also, bonus depreciation now applies to 100% of a large expense, rather than 40%, as it did in 2024.

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If you are planning to make a major purchase for your private practice, it is now more likely that you can write off the entire amount in the year you make it. The result? A major decrease in current-year tax liability.

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That’s only the beginning 

These are the most significant changes to tax credits and deductions introduced by the OBBB—but there are more. For a full breakdown, check out How the One Big Beautiful Bill Impacts Your Private Practice Taxes, and What to Do About It.

Heard keeps your deductions and credits on track

When you use Heard, your private practice’s expenses are automatically imported and categorized in your bookkeeping system. You get all the data you need to calculate your deductions and credits and claim them, making the most of tax savings available to your practice. Interested? Book a free consult.

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Curious how the Big Beautiful Bill will impact your taxes? Learn more here.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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Bryce Warnes is a West Coast writer specializing in small business finances.

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