The “One Big, Beautiful Bill” (OBBB) signed into law on July 4, 2025 introduced sweeping changes, some of which could impact quarterly estimated tax payments for your private practice.

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Specifically, new increased limits on particular tax credits and deductions could allow you to reduce your practice’s tax burden as early as the 2025 tax year. 

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Any tax overpayment is an interest-free loan to the IRS. If your projections show you with a smaller tax bill for 2025 or 2026, you may be able to make lower quarterly estimated payments and reap the benefits in the form of more retained revenue.

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Here are the deductions and credits most likely to lower your tax liability and, in turn, your quarterly estimated payments. 

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Heads up: Don’t forget the safe harbor rule

The safe harbor rule helps you avoid penalties for underpaying quarterly estimated tax payments.

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To put it simply, so long as your total quarterly estimated payments are equivalent to 100% of your tax liability for the prior year, you won’t be penalized even if you underpay. (That number is 110% filers whose adjusted gross income (AGI) is $150,000 or more.)

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(You will, however, still need to pay the total of the current year’s tax liability.)

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Many practice owners use the safe harbor rule to estimate their taxes for the current year. If you determine that you will owe less in taxes this year because of increased deductions and credits, and as a result pay less than the equivalent of last year’s tax bill, the safe harbor rule won’t protect you. 

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For more on the safe harbor rule, and the most common methods for calculating estimated taxes, check out How to Pay Quarterly Estimated Taxes for Your Therapy Practice.

Pass-Through Entity Tax workarounds and the State and Local Tax limit increase

The State and Local Tax (SALT) deduction allows you to deduct the expense of state and local taxes from your federal tax bill. It’s an above-the-line deduction claimed on your personal tax return that can result in considerable savings for you as an individual.

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From 2017 to 2025, the cap on this deduction was $10,000. (Prior to 2017 and the Tax Cuts and Jobs Act (TCJA), there was no cap.) 

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The OBBB raised the cap to $40,000, with a scheduled return to the $10,000 limit after the 2029 tax year.

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If you live in a state with high taxes, the increased cap could mean a bigger SALT deduction in 2025.

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The Pass-Through Entity Tax (PTET) workaround is related to the SALT deduction. After the introduction of the $10,000 cap in 2017, many states created PTET as a means for qualifying businesses to claim deductions in excess of $10,000. 

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Businesses can pay the PTET directly, rather than having their shareholders or partners claim portions of the SALT deduction on their personal returns. The PTET is then claimed as a business deduction—distinct from the above-the-line SALT deduction—on the business’s tax return.

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Over 30 states have implemented PTET so far. Until the OBBB, there was some risk to taxpayers, because the federal government was in a position to challenge PTET.

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The OBBB introduced PTET protections that guarantee the workaround will remain available in the foreseeable future. That makes PTET a safe bet for reducing your tax burden even in excess of the new $40,000 SALT cap.

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Employee benefit credits

The OBBB increased the Employer Childcare Credit from 25%, with a $150,000 limit, to 40% with a $500,000 limit. (Or 50% and $600,000, respectively, for qualifying small businesses.)

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So, if you provide or subsidize childcare for employees at your private practice, you can expect a bigger tax credit in 2025.

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The OBBB also made changes to the Paid Medical and Family Leave (PMFL) credit, which has been permanently extended. You can now receive a larger credit for providing your employees with this benefit if you pay their insurance premiums during their absence. And eligibility for the credit has expanded to states with mandated PMFL laws.

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Both of these credits have the potential to lower your tax bill, allowing you to make lower quarterly estimated payments.

Current-year expensing of large purchases

Both the Section 179 deduction and bonus depreciation allow you to write off the entirety of a large purchase in the year you make it, rather than depreciating the expense over subsequent years.

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The OBBB has raised the limit on the Section 179 deduction from $1.25 million to $2.5 million.

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And bonus depreciation is returned to 100% of a large expense, having previously been scheduled to phase out (the limit was 40% in 2024).

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As a result, you have the potential to claim large current-year deductions for major purchases like equipment and real estate. Taking advantage of these deductions could drastically lower your tax bill.

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That’s only the beginning 

These are just the deductions and credits likely to have the biggest impact on your private practice’s tax bill. For a full breakdown, check out How the One Big Beautiful Bill Impacts Your Private Practice Taxes, and What to Do About It.

Quarterly taxes are simpler with Heard

When you sign up for an Essential or Premium plan with Heard, your accounting team will automatically generate quarterly tax estimates and guide you through the process of filing and paying them. That takes the guesswork out of quarterly estimated taxes and ensures you avoid penalties for underpayment. Book a free consult.

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Want to learn more about how the Big Beautiful Bill will affect 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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