Since 2018, property managers have been in a position to benefit from numerous tax breaks approved by the Tax Cuts and Jobs Act (TCJA). Nonetheless, a number of of these tax breaks have been initially set to run out on the finish of 2025 except Congress stepped in to increase them.
With the passage of the One Large Lovely Invoice Act (OBBBA) in 2025, a few of the most vital TCJA provisions for property managers—such because the 20% Certified Enterprise Earnings deduction and bonus depreciation—have now been up to date. These adjustments have an effect on the way you forecast taxable earnings, plan capital purchases, and put together for 2026 and past.
It doesn’t matter what occurs subsequent, that is nonetheless a superb time to know what’s altering, what’s staying the identical, and the way your tax legal responsibility might look going ahead.
Disclaimer: This weblog put up has been up to date as of December 2025 and isn’t meant to take the place of the steering of an accountant or tax skilled. For particular tax or accounting recommendation, seek the advice of an authorized accountant.
What Is the Tax Cuts and Jobs Act?
The Tax Cuts and Jobs Act is a significant overhaul of the U.S. tax code handed in 2017 below the primary Trump administration. It took impact in 2018 with the purpose of stimulating financial development and creating new jobs by reducing taxes on people and companies.
Whereas a few of the TCJA provisions are everlasting, equivalent to lowering the company tax price from a prime price of 35% to a flat 21%, others are short-term and set to run out between 2025 and 2028 (except prolonged via new laws).
The Expiring TCJA Provisions That Influence Property Managers
The TCJA has supplied a spread of tax breaks for property managers—from deductions on earnings to accelerated write-offs on enhancements. A number of of those provisions have been initially set to section out after 2025. Nonetheless, the One Large Lovely Invoice Act (OBBBA) has now up to date two of essentially the most vital objects that property managers depend on.
Right here’s what these adjustments seem like immediately.
Certified Enterprise Earnings Deduction
Also called the Part 199A deduction, the certified enterprise earnings deduction applies to pass-through entities (sole proprietorships, LLCs, partnerships, and S-corporations), below which most property administration companies fall.
It permits you to deduct as much as 20% of your certified enterprise earnings (QBI), which the IRS defines as “the online quantity of certified objects of earnings, achieve, deduction and loss from any certified commerce or enterprise.” This excludes any capital features or losses, sure dividends, and curiosity earnings.
For instance, in the event you earn $100,000 in QBI out of your property administration enterprise, you may deduct $20,000 ($100,000 x 0.2). That is on prime of every other enterprise deductions and applies whether or not or not you itemize deductions.
Initially, the QBI deduction was set to run out on December 31, 2025. Underneath the OBBBA, this deduction is now everlasting for eligible pass-through companies.
Property managers organized as LLCs, partnerships, S-corps, or sole proprietorships can proceed counting on this deduction with out getting ready for the prior 2026 sundown.
Bonus Depreciation on Enterprise Belongings
The TCJA launched 100% bonus depreciation on qualifying new or used enterprise property, permitting you to totally deduct the price of sure property within the 12 months they have been positioned in service. Earlier than the OBBBA, this profit had already begun phasing down, with the deduction scheduled to fall to 40% in 2025 and finally 0% in 2027.
The OBBBA has restored bonus depreciation to 100% for certified property positioned in service after January 20, 2025.
This replaces the earlier phase-out schedule fully. Property managers buying autos, gear, constructing programs, and different qualifying property can as soon as once more deduct the complete value within the first 12 months.
Different TCJA Provisions for Property Managers That Are Not Expiring
Not all TCJA provisions have been short-term. The next objects stay unchanged:
Decrease Company Tax Fee
The TCJA completely decreased the company earnings tax price from a prime price of 35% to a flat price of 21%. Meaning in case your property administration enterprise is structured as a C-corporation, you’ll be able to count on your company tax price to stay 21%.
Decrease Particular person Tax Charges
Most property administration companies are pass-through entities, that means earnings is handed on to house owners, shareholders, or buyers. On this case, your online business earnings is taxed on the particular person degree in line with federal earnings tax charges.
The TCJA lowered earnings tax charges for people at nearly all ranges and shifted the thresholds of many earnings tax brackets. Listed below are the earnings tax charges for a single-taxpayer in 2026:
| Tax price | Taxable earnings… | As much as… |
| 10% | $0 | $12,400 |
| 12% | $12,401 | $50,400 |
| 22% | $50,401 | $105,700 |
| 24% | $105,701 | $201,775 |
| 32% | $201,776 | $256,225 |
| 35% | $256,226 | $626,350 |
| 37% | $640,601 | And up |
Supply: TaxFoundation.org
Increased Part 179 Deduction Limits
Underneath Part 179 of the tax code, property managers can deduct as much as $1.22 million for certified enterprise property in 2024. Nonetheless, the deduction restrict is decreased by the quantity by which the price of the property exceeds $3.05 million (the phaseout threshold).
The TCJA initially raised the Part 179 deduction restrict from $500,000 to $1 million and the phaseout threshold from $2 million to $2.5 million. Since then, each the bounds and phaseout thresholds have elevated yearly for inflation and are set to proceed rising every year.
Increased Automobile Depreciation Deduction
The TCJA raised the depreciation restrict for passenger autos used for enterprise. In case you don’t use bonus depreciation or the usual mileage price ($0.67/mile in 2024), you’ll be able to deduct as much as:
- $10,000 for the primary 12 months,
- $16,000 for the second 12 months,
- $9,600 for the third 12 months, and
- $5,760 for every later taxable 12 months within the restoration interval.
In case you declare bonus depreciation, you’ll be able to write off as much as $18,000 within the first 12 months, and as much as the identical deduction limits listed above for later years. These limits received’t section out below the TCJA. If something, they could be raised to account for inflation.
Reply for the Phaseout of TCJA Provisions
With the passage of the One Large Lovely Invoice Act (OBBBA), two of the largest issues for property managers have now been addressed. Even so, tax coverage can evolve, and it’s nonetheless value getting ready for shifts within the tax code past 2025.
Ought to remaining TCJA provisions revert to pre-2017 ranges sooner or later, chances are you’ll wish to think about:
- Restructuring your pass-through entity right into a C-corporation to benefit from its 21% flat tax price. This turns into extra engaging the extra earnings your online business generates. For instance, in the event you make $626,351 or extra in 2025, you’ll fall into the 37% earnings tax bracket. Nonetheless, do not forget that C-corporations should additionally cope with double taxation.
- Timing future capital expenditures to align with up to date bonus depreciation guidelines. Underneath the OBBBA, 100% bonus depreciation is on the market once more for certified property positioned in service after January 20, 2025. Property managers buying autos, computer systems, or different gear might profit from planning the timing of those purchases to qualify for full expense advantages.
Finally, your greatest wager is to seek the advice of a licensed tax or authorized skilled who can assist you fortify your property administration enterprise in opposition to potential tax code adjustments.
Instruments and Assets to Put together for Potential Tax Modifications
You’re not by yourself in the case of property administration tax technique and getting ready for tax adjustments later down the street. Listed below are some useful instruments and assets to discover:
- Buildium’s complete tax reporting information: Find out about property administration deductions, bonus depreciation, tax credit, tax submitting and deadlines, 1099 submitting, 1031 exchanges, the tax implications of the Inflation Discount Act (IRA), and far more. This information explains all of it in easy phrases you’ll be able to perceive.
- Buildium’s 1099 e-Submitting for property managers: Begin the 12 months off proper by e-filing your 1099-MISCs and 1099-NECs via Buildium. Our platform routinely tracks all of the funds you’ve made to property house owners and distributors in an effort to file correct and well timed 1099 kinds and ship free copies to recipients.
- Buildium’s property administration accounting options: Buildium makes bookkeeping simpler by monitoring hire, charges, and deposits in addition to funds to your organization, property house owners, and distributors. Its central platform seamlessly integrates on-line funds, reconciles financial institution accounts, and ensures you adjust to accounting requirements.
Use Buildium to Shield Your Property Administration Enterprise From Future Tax Modifications
It doesn’t matter what occurs to the U.S. tax code within the coming years, you’ll be able to’t go fallacious investing in sturdy accounting software program. At Buildium, our purpose-built property administration platform is designed to maintain your online business funds organized.
That manner, if the tax code adjustments and you should alter your online business operations, you’ll have an in depth view of your earnings, working prices, earnings, and different monetary metrics.
See how Buildium handles real-world duties with our free, 14-day trial—no bank card required. In case you want a extra structured walkthrough, you may also schedule a free demo. We’re more than pleased to information you thru each function you’d prefer to see in motion.
Steadily Requested Questions
Will the Tax Cuts and Jobs Act nonetheless expire after 2025?
Some TCJA provisions are nonetheless scheduled to sundown except Congress extends them, however two main objects that have an effect on property managers—the Certified Enterprise Earnings (QBI) deduction and bonus depreciation—have been up to date by the One Large Lovely Invoice Act (OBBBA). The QBI deduction is now everlasting, and bonus depreciation has been restored to 100% for qualifying property positioned in service after January 20, 2025.
Is the 20% Certified Enterprise Earnings deduction nonetheless ending?
No. The QBI deduction was initially set to run out after 2025, however the OBBBA made it everlasting. Property managers working as LLCs, partnerships, S-corps, or sole proprietorships can proceed claiming the deduction long run.
What occurred to the bonus depreciation phase-down?
The unique phase-down has been changed—scheduled to cut back bonus depreciation every year till it reached 0%. Underneath the OBBBA, 100% bonus depreciation now applies to certified property positioned in service after January 20, 2025.
Does the OBBBA change all TCJA provisions for property managers?
No. Most everlasting adjustments from the TCJA stay intact, together with the 21% company tax price, elevated Part 179 limits, and up to date particular person tax brackets. The OBBBA focuses primarily on updating objects that have been beforehand scheduled to run out, equivalent to QBI and bonus depreciation.
Do these adjustments have an effect on how property managers file taxes?
The submitting workflow stays the identical, however the deductions out there might look completely different than they did earlier than the OBBBA. Up to date QBI and depreciation guidelines might shift your taxable earnings, so it’s a good suggestion to overview the brand new numbers earlier than submitting.
Does this replace have an effect on state tax obligations?
Presumably. Some states conform routinely to federal adjustments, whereas others undertake updates selectively or under no circumstances. Property managers ought to test with a tax skilled acquainted with their state’s guidelines to see how OBBBA-related adjustments apply domestically.
Learn extra on Accounting & Reporting
