Since 2018, property managers have been able to take advantage of various tax breaks authorized by the Tax Cuts and Jobs Act (TCJA). However, several of those tax breaks were originally set to expire at the end of 2025 unless Congress stepped in to extend them.
With the passage of the One Big Beautiful Bill Act (OBBBA) in 2025, some of the most important TCJA provisions for property managers—such as the 20% Qualified Business Income deduction and bonus depreciation—have now been updated. These changes affect how you forecast taxable income, plan capital purchases, and prepare for 2026 and beyond.
No matter what happens next, this is still a good time to understand what’s changing, what’s staying the same, and how your tax liability may look going forward.
Disclaimer: This blog post has been updated as of December 2025 and is not meant to take the place of the guidance of an accountant or tax professional. For specific tax or accounting advice, consult a certified accountant.
What Is the Tax Cuts and Jobs Act?
The Tax Cuts and Jobs Act is a major overhaul of the U.S. tax code passed in 2017 under the first Trump administration. It took effect in 2018 with the goal of stimulating economic growth and creating new jobs by lowering taxes on individuals and businesses.
While some of the TCJA provisions are permanent, such as reducing the corporate tax rate from a top rate of 35% to a flat 21%, others are temporary and set to expire between 2025 and 2028 (unless extended through new legislation).
The Expiring TCJA Provisions That Impact Property Managers
The TCJA has offered a range of tax breaks for property managers—from deductions on income to accelerated write-offs on improvements. Several of these provisions were originally set to phase out after 2025. However, the One Big Beautiful Bill Act (OBBBA) has now updated two of the most significant items that property managers rely on.
Here’s what those changes look like today.
Qualified Business Income Deduction
Also known as the Section 199A deduction, the qualified business income deduction applies to pass-through entities (sole proprietorships, LLCs, partnerships, and S-corporations), under which most property management businesses fall.
It lets you deduct up to 20% of your qualified business income (QBI), which the IRS defines as “the net amount of qualified items of income, gain, deduction and loss from any qualified trade or business.” This excludes any capital gains or losses, certain dividends, and interest income.
For example, if you earn $100,000 in QBI from your property management business, you could deduct $20,000 ($100,000 x 0.2). This is on top of any other business deductions and applies whether or not you itemize deductions.
Originally, the QBI deduction was set to expire on December 31, 2025. Under the OBBBA, this deduction is now permanent for eligible pass-through businesses.
Property managers organized as LLCs, partnerships, S-corps, or sole proprietorships can continue relying on this deduction without preparing for the prior 2026 sunset.
Bonus Depreciation on Business Assets
The TCJA introduced 100% bonus depreciation on qualifying new or used business assets, allowing you to fully deduct the cost of certain assets in the year they were placed in service. Before the OBBBA, this benefit had already begun phasing down, with the deduction scheduled to fall to 40% in 2025 and eventually 0% in 2027.
The OBBBA has restored bonus depreciation to 100% for qualified property placed in service after January 20, 2025.
This replaces the previous phase-out schedule entirely. Property managers purchasing vehicles, equipment, building systems, and other qualifying assets can once again deduct the full cost in the first year.
Other TCJA Provisions for Property Managers That Are Not Expiring
Not all TCJA provisions were temporary. The following items remain unchanged:
Lower Corporate Tax Rate
The TCJA permanently reduced the corporate income tax rate from a top rate of 35% to a flat rate of 21%. That means if your property management business is structured as a C-corporation, you can expect your corporate tax rate to remain 21%.
Lower Individual Tax Rates
Most property management businesses are pass-through entities, meaning income is passed directly to owners, shareholders, or investors. In this case, your business income is taxed at the individual level according to federal income tax rates.
The TCJA lowered income tax rates for individuals at almost all levels and shifted the thresholds of many income tax brackets. Here are the income tax rates for a single-taxpayer in 2026:
| Tax rate | Taxable income… | Up to… |
| 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 |
Source: TaxFoundation.org
Higher Section 179 Deduction Limits
Under Section 179 of the tax code, property managers can deduct up to $1.22 million for qualified business assets in 2024. However, the deduction limit is reduced by the amount by which the cost of the property exceeds $3.05 million (the phaseout threshold).
The TCJA originally raised the Section 179 deduction limit from $500,000 to $1 million and the phaseout threshold from $2 million to $2.5 million. Since then, both the limits and phaseout thresholds have increased annually for inflation and are set to continue increasing each year.
Higher Car Depreciation Deduction
The TCJA raised the depreciation limit for passenger vehicles used for business. If you don’t use bonus depreciation or the standard mileage rate ($0.67/mile in 2024), you can deduct up to:
- $10,000 for the first year,
- $16,000 for the second year,
- $9,600 for the third year, and
- $5,760 for each later taxable year in the recovery period.
If you claim bonus depreciation, you can write off up to $18,000 in the first year, and up to the same deduction limits listed above for later years. These limits won’t phase out under the TCJA. If anything, they may be raised to account for inflation.
How to Respond for the Phaseout of TCJA Provisions
With the passage of the One Big Beautiful Bill Act (OBBBA), two of the biggest concerns for property managers have now been addressed. Even so, tax policy can evolve, and it’s still worth preparing for shifts in the tax code beyond 2025.
Should remaining TCJA provisions revert to pre-2017 levels in the future, you may want to consider:
- Restructuring your pass-through entity into a C-corporation to take advantage of its 21% flat tax rate. This becomes more attractive the more income your business generates. For example, if you make $626,351 or more in 2025, you’ll fall into the 37% income tax bracket. However, remember that C-corporations must also deal with double taxation.
- Timing future capital expenditures to align with updated bonus depreciation rules. Under the OBBBA, 100% bonus depreciation is available again for qualified property placed in service after January 20, 2025. Property managers purchasing vehicles, computers, or other equipment may benefit from planning the timing of these purchases to qualify for full expense benefits.
Ultimately, your best bet is to consult a licensed tax or legal professional who can help you fortify your property management business against potential tax code changes.
Tools and Resources to Prepare for Potential Tax Changes
You’re not on your own when it comes to property management tax strategy and preparing for tax changes later down the road. Here are some helpful tools and resources to explore:
- Buildium’s comprehensive tax reporting guide: Learn about property management deductions, bonus depreciation, tax credits, tax filing and deadlines, 1099 filing, 1031 exchanges, the tax implications of the Inflation Reduction Act (IRA), and much more. This guide explains it all in simple terms you can understand.
- Buildium’s 1099 e-Filing for property managers: Start the year off right by e-filing your 1099-MISCs and 1099-NECs through Buildium. Our platform automatically tracks all the payments you’ve made to property owners and vendors so that you can file accurate and timely 1099 forms and send free copies to recipients.
- Buildium’s property management accounting features: Buildium makes bookkeeping easier by tracking rent, fees, and deposits as well as payments to your company, property owners, and vendors. Its central platform seamlessly integrates online payments, reconciles bank accounts, and ensures you comply with accounting standards.
Use Buildium to Protect Your Property Management Business From Future Tax Changes
No matter what happens to the U.S. tax code in the coming years, you can’t go wrong investing in robust accounting software. At Buildium, our purpose-built property management platform is designed to keep your business finances organized.
That way, if the tax code changes and you need to adjust your business operations, you’ll have a detailed view of your income, operating costs, profits, and other financial metrics.
See how Buildium handles real-world tasks with our free, 14-day trial—no credit card required. If you prefer a more structured walkthrough, you can also schedule a free demo. We’re more than happy to guide you through every feature you’d like to see in action.
Frequently Asked Questions
Will the Tax Cuts and Jobs Act still expire after 2025?
Some TCJA provisions are still scheduled to sunset unless Congress extends them, but two major items that affect property managers—the Qualified Business Income (QBI) deduction and bonus depreciation—were updated by the One Big Beautiful Bill Act (OBBBA). The QBI deduction is now permanent, and bonus depreciation has been restored to 100% for qualifying property placed in service after January 20, 2025.
Is the 20% Qualified Business Income deduction still ending?
No. The QBI deduction was originally set to expire after 2025, but the OBBBA made it permanent. Property managers operating as LLCs, partnerships, S-corps, or sole proprietorships can continue claiming the deduction long term.
What happened to the bonus depreciation phase-down?
The original phase-down has been replaced—scheduled to reduce bonus depreciation each year until it reached 0%. Under the OBBBA, 100% bonus depreciation now applies to qualified property placed in service after January 20, 2025.
Does the OBBBA change all TCJA provisions for property managers?
No. Most permanent changes from the TCJA remain intact, including the 21% corporate tax rate, increased Section 179 limits, and updated individual tax brackets. The OBBBA focuses mainly on updating items that were previously scheduled to expire, such as QBI and bonus depreciation.
Do these changes affect how property managers file taxes?
The filing workflow remains the same, but the deductions available may look different than they did before the OBBBA. Updated QBI and depreciation rules may shift your taxable income, so it’s a good idea to review the new numbers before filing.
Does this update affect state tax obligations?
Possibly. Some states conform automatically to federal changes, while others adopt updates selectively or not at all. Property managers should check with a tax professional familiar with their state’s rules to see how OBBBA-related changes apply locally.
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