• Aligning international tax strategy with global supply chain planning helps reduce tax exposure, capture incentives, and increase operational agility.

• Ignoring exit taxes, transfer pricing, or cross-border compliance risks can create multi-year tax liabilities, penalties, and restructuring costs.

• Involving tax leaders early in global supply chain restructuring leads to smarter decisions, improved timelines, and long-term business scalability.

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In today’s dynamic global business environment, aligning your organization’s international tax planning with supply chain planning strategy isn’t just a best practice — it’s essential. From shifting trade relationships and tariffs to increased scrutiny from global tax authorities, your company’s ability to make tax-informed supply chain decisions can directly impact cash flow, risk profile, and competitive positioning.

Here’s how your tax and operations leaders can collaborate to build a globally agile structure, and why international tax strategy must be at the core.

Why International Tax Strategy Must Drive Global Supply Chain Decisions

Mid-market organizations are rethinking their operational footprint — reshoring, nearshoring, or diversifying supplier bases. But without a clear international tax lens, these shifts can trigger unintended consequences: exit taxes, loss of treaty benefits, or transfer pricing risks.

A tax-aligned supply chain strategy allows you to:

• Forecast and manage global tax liabilities

• Capture incentives and avoid inefficiencies

• Make faster, more informed decisions across jurisdictions

Integrate International Tax Early in the Planning Process

Waiting until after operations moves are underway can leave your business with a fragmented tax structure that requires costly remediation. This is especially critical for mid-market companies operating across the U.S., EMEA (Europe, the Middle East, and Africa), or APAC (Asia-Pacific) regions, where cross-border structuring can create unexpected tax burdens. Tax should be involved from the outset — modeling scenarios across jurisdictions, projecting costs, and identifying risk exposure.

For example:

• Moving production from China to Mexico might avoid certain tariffs — but could expose your business to exit taxes in China or permanent establishment risk in Mexico.

• Relocating intellectual property (IP) from Ireland to the U.S. might trigger a deemed disposal event under local exit tax regimes.

Technology platforms and predictive models can help tax teams simulate these impacts before major decisions are finalized.

Strengthening Transfer Pricing and Global Compliance

Global tax authorities are tightening enforcement — especially around transfer pricing and cross-border restructurings. If your tax structure no longer reflects your actual operations, you may face:

• Double taxation

• Disallowed deductions

• Penalties and disputes

Update your transfer pricing documentation to reflect the new supply chain model. Intercompany agreements, economic analyses (including IP valuation), and jurisdictional reporting must all align with your post-transition structure.

Unlock Incentives Through Coordinated Strategy

Supply chain shifts aren’t just about avoiding risk — they’re also an opportunity to capture new value. Jurisdictions including the U.S., Canada, Mexico, and certain European Union countries offer targeted tax incentives for reshoring, green investment, R&D, or job creation.

If these incentives aren’t launched early in planning, your business could miss out. Tax should coordinate with operations and finance teams to explore:

• U.S. federal and state credits for manufacturing investment

• R&D credits tied to newly localized functions

• Foreign tax credits or deferrals available in new jurisdictions

Create a Globally Scalable Tax Playbook

Reactive tax planning doesn’t scale. As your organization enters new markets, integrates M&A targets, or adds new suppliers, your international tax model must be flexible and supported by a clear global tax governance framework.

A forward-looking playbook helps you:

• Align tax structure with business decisions

• Build global tax governance into location changes, IP moves, and new legal entities

• Reduce friction during rapid growth or operational transformation

The Path Forward: Strategy, Agility, and Risk Reduction

International supply chain restructuring can unlock efficiency, improve margins, and reduce geopolitical exposure — but only if tax is at the table from the start.

Organizations that treat tax as a strategic partner rather than a compliance function are better positioned to navigate volatility and create long-term value.

How MGO Can Help

At MGO, we help companies navigate the complexities of global tax strategies and cross-border operations. From international structuring and transfer pricing to tax technology and incentive optimization, we serve clients across manufacturing, life sciences, technology, and more.

We work closely with CFOs and tax executives to align tax planning with business transformation — supporting global agility, regulatory compliance, and strategic growth. Let’s talk about how your international tax strategy can support your global operations.

The post How to Align Your Global Supply Chain and International Tax Strategy appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• High-net-worth individuals often have multiple income streams and need to coordinate tax strategies across entity types and asset classes.

• The proper structuring of investments can often have a significant positive impact on the economic gain realized.

• Start to plan at least 18 to 24 months before the sale of a closely held business to ensure proper structure, boost business valuation, and improve after-tax outcomes.

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You’ve built significant wealth. As a result, taxes have become more than just a line item in your budget — they’re a force that can quietly erode your returns, complicate your business exit, and reshape your legacy.

Fortunately, you have a window of opportunity to take control. Proactive tax planning can help you align today’s strategies with tomorrow’s vision — whether you’re juggling multiple businesses, eyeing a potential sale of an investment, or preparing to transition out of your company.

This article examines how to approach tax planning to maximize your earnings and stay ahead as tax laws shift.

Understanding the Tax Implications of Different Income Streams

The average high-net-worth individual typically has around seven income streams. These can include salaries and wages, pensions and annuities, interest, dividends, capital gains, rental and royalties, business profits, and more.

Each type of income can face different tax rules and rates — which makes planning across all sources critical.

For example, you might defer income into years where your marginal rate is lower (such as in retirement or during a gap year after a business sale), accelerate deductions in high-income years to offset earnings, or swap investment property using a 1031 like-kind exchange to defer recognition of capital gains.

Strategically harvesting investment losses can also help manage bracket thresholds and your exposure to the net investment income tax (NIIT).

Also, consider how you generate income through various entities. Sometimes, an investment’s structure can have a greater impact on tax outcomes than the investment itself.

For example, at the federal level, income from a C corporation is taxed at both the corporate (21%) and shareholder levels (up to 23.8% on dividends), resulting in effective tax rates that leave less than half of earnings in your control once you layer in state taxes. In contrast, S corporations and other passthrough structures may offer favorable pass-through treatment and qualify for a QBI deduction (20% of the business income).

Planning for Business Exits with Taxes in Mind

Selling a closely held business may be a once-in-a-lifetime event. The company may make up a large portion of your net worth and, with so much at stake, the tax treatment of the sale can dramatically alter the outcome.

We recommend that business owners start preparing for a sale at least 18 to 24 months in advance. But even if a sale isn’t on the immediate horizon, business owners should operate as though the company is always “for sale”. Opportunities often arise unexpectedly and financials that aren’t sale-ready can delay or derail a deal. Minimize all working capital kept in the business for at least the year preceding a sale. You will not be paid any more money for a business with a ton of working capital versus the minimum.

A knowledgeable CPA can help you identify red flags, clean up reporting, and implement strategies that improve the business’s financial profile so you’re prepared to act when the timing is right.

A longer timeline gives you runway to halt unnecessary reinvestment and boost earnings before interest, taxes, depreciation, and amortization (EBITDA) — directly affecting the sale price and reducing excess working capital.

Structuring the Deal

The structure of a sale plays a crucial part in the tax treatment of potential gains. Many sales of closely held businesses take the form of asset sales rather than stock sales, mainly because asset purchases offer more favorable terms to the buyer. When a buyer purchases the company’s assets, they avoid inheriting legacy liabilities and can allocate the purchase price among depreciable assets for future tax benefits.

However, even for transactions legally structured as a stock sale, buyers may use a Section 338(h)(10) election to treat the deal as an asset sale for tax purposes. This hybrid structure provides the buyer with the benefits of an asset acquisition while technically acquiring the stock.

From the seller’s perspective, both methods can yield similar tax outcomes. The gain from the sale typically flows through to the owner as a capital gain. If any portion of the purchase price is allocated to depreciated fixed assets, there may be a small amount of ordinary income due to depreciation recapture. As long as the owner is actively involved in the business at the time of sale, it’s generally exempt from the 3.8% NIIT.

In some cases, especially in deals involving private equity, buyers want to retain the existing owner’s involvement, so the buyer may acquire a majority interest and require the seller to continue managing the business. This is often structured through an F-reorganization, which allows for tax deferral on the portion of the business not immediately sold.

Another common feature of modern deals is the earnout: a portion of the sale price that’s paid over time based on the company’s future performance — usually tied to EBITDA targets. Earnouts can create significant tax planning opportunities and risks when they extend over several years.

Finally, for owners concerned about a large tax hit, investing the gain into Qualified Opportunity Zone (QOZ) funds can provide a way to defer capital gains and potentially reduce future taxes. This benefit was made permanent by the One Big Beautiful Bill Act.

Working closely with a CPA who understands these nuances allows you to align the terms of the sale with your broader financial goals.

Potential Section 1202 Tax Saving Strategies

Selling qualified small business stock (QSBS) may qualify for Section 1202 treatment. This tax provision allows individuals to avoid paying taxes on up to 100% of the taxable gain recognized on the sale of QSBS. The gain exclusion is worth $10 million or 10 times investment basis and applies to C Corporation stock issued after August 10, 1993, and before July 4, 2025, held for at least five years.

The recently passed One Big Beautiful Bill Act increases the Section 1202 exclusion for gain to $15 million or 10 times basis for QSBS acquired after July 4, 2025, and held for at least five years. There is a reduced gain excluded if the stock issued after July 4, 2025, is only held for three years (50% exclusion) or four years (75% exclusion).

Section 1202 creates an effective tax rate savings of up to 23.8% for federal income tax, and many states follow the federal treatment — resulting in even more substantial savings.

How MGO Can Help

Tax outcomes are rarely 100% predictable, but we can help shape them with foresight and planning.

Now is the time to take a closer look at your income, investments, and business interests. Don’t wait until the tax code changes. Schedule a planning session with an MGO advisor to start building a roadmap today.

The post Proactive Tax Planning Strategies for Exiting Your Closely Held Business appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The new $40,000 state and local tax deduction is helpful but insufficient for those that own and operate pass-through entities. These taxpayers should look at pass-through entity tax (PTET) planning.

• PTET elections remain a key strategy for maximizing state tax deductions for federal tax purposes.

• Pass-through owners should have their tax advisors model multi-year tax exposure across state PTET rules.

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The 2025 tax reset isn’t just about federal rates — it’s reigniting state and local tax (SALT) strategy discussions for pass-through businesses and their high-earning owners.

With the SALT deduction cap rising from $10,000 to $40,000 and optional pass-through entity tax (PTET) regimes still in play across most states, CFOs and tax advisors need to re-examine how entity-level elections and personal income tax deductions on an owner’s 1040 Schedule A interact with one another. The decisions you make now could materially change both business and personal cash flow.

Key Takeaway #1: SALT Cap Now at $40,000 — But With a Catch

The increased cap allows for up to $40,000 of state and local tax deductions — a significant jump from the $10,000 limit placed on Schedule A deductions under the Tax Cuts and Jobs Act (TCJA) of 2017. But for most mid-market business owners and executives, it won’t make a huge dent without more planning.

Also keep in mind that with the SALT cap being raised to $40,000, this may make some or all of your state tax refund taxable on your federal return. This requires planning as well to determine the impact of the increased SALT cap. Additionally, there is a phase out of the $40,000 cap for taxpayers with modified adjusted gross income (MAGI) over $500,000. At $600,000 in MAGI, the SALT cap phases back down to $10,000. This phase out has been labeled the “SALT torpedo”.

Action tip:

• Confirm which state tax payments are eligible under the new definition (income, property, sales).

• Consider timing payments to maximize deduction value across years.

• Consider potential of federal taxability of any state tax refunds.

• Consider whether you may be subjected to the SALT cap phase out if your income is between $500,000–$600,000.

Key Takeaway #2: PTET Still Has Teeth — Especially in States Like California, New York, and Hawaii With the Highest State Tax Rates

Despite the higher SALT cap, the PTET remains a powerful tool — especially since entity-level taxes are generally not subject to the SALT cap at all.

In California, for example, the PTET election was extended through 2030, offering owners of S corps, LLCs, and partnerships a continuing opportunity to shift tax liability from personal to business returns.

Action tip:

• Take a hard look at PTET election scenarios for 2025–26 now with the new SALT structure in place retroactive to January 1, 2025.

• Consider combined strategies that include SALT cap maximization plus PTET layering.

• Model cash flow implications.

Key Takeaway #3: State-by-State PTET Strategy Still Matters

Not all state PTET programs are equal. Some states need annual elections, some require mid-year deposits, some are retroactive, and others carry risks of double taxation if owner-level credits aren’t managed properly.

Action tip:

• Review your state’s PTET mechanics and deadlines (especially if you operate a pass-through entity in multiple states).

• Coordinate with all of the business owners on credit carry forwards and reporting obligations. Verify the tax credit needs at the individual levels each year before making an election.

Case Study: How a California S Corp Owner Could Save up to $44,000

A California-based S corporation owner with $1.2 million in annual passthrough income faced a common dilemma: How to navigate state tax liabilities under the newly expanded SALT deduction while maximizing federal deductibility.

Before PTET:
The owner pays ~$130,000 in California income tax. Under the SALT cap — even raised to $40,000 — this would be phased back down to just $10,000 due to MAGI being over $600,000. The owner would technically lose out on a state tax deduction of $120,000+, increasing their federal tax burden by between $36,000-$44,000.

With PTET election:
The S corp elects to pay California’s pass-through entity tax. This shifts the majority of the state tax liability to the business level, allowing the owner to deduct $111,600 as a business expense and $10,000 on Schedule A, leaving only less than $10,000.

Net effect: Depending on the taxpayer’s bracket and other factors, this move could generate up to $44,000 in federal tax savings.

Take a Proactive Approach to Salt Cap and PTET Planning

The SALT cap increased itemized deduction is a welcome change — but it doesn’t cut the value of PTET planning. The most tax-efficient path in 2025 will likely involve stacking strategies: Using the $40,000 SALT deduction where applicable and electing the PTET to capture other deductions at the entity level. Each state’s rules vary, so a proactive approach is key.

How MGO Can Help

Want to assess whether PTET or SALT stacking makes sense for your entity structure? Contact our State and Local Tax team today to model your 2025 exposure and explore multi-state optimization.

The post How to Manage Deductions Under the New $40,000 SALT Cap and PTET Rules appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• New EBITDA-based deduction rules may reduce your company’s taxable income significantly.

• Capital-intensive and IP-driven businesses stand to benefit the most from this tax change.

• Your tax strategy may need updates to maximize savings and follow new interest deduction rules.

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If your business carries significant debt and works in a capital-intensive or intellectual property (IP)-heavy industry, a long-anticipated tax law change could substantially lower your federal tax bill. The shift — part of recent legislation — reintroduces a more favorable formula for deducting business interest, allowing many mid-market companies to benefit — especially those in manufacturing, telecom, life sciences, and tech.

Background

As of July 2025, businesses can now calculate interest deductions using 30% of EBITDA (earnings before interest, taxes, depreciation, and amortization), rather than EBIT. This adjustment expands the deduction cap and directly benefits companies with heavy equipment investments or large intangible asset portfolios. The change could translate into millions in annual savings — freeing up cash flow for reinvestment, hiring, or expansion.

What’s Changed — And Why It Matters to You

Before this change, companies could only deduct interest up to 30% of EBIT — a narrower measure of income. This penalized firms with large depreciation and amortization expenses, reducing their ability to fully deduct interest on debt.

Now, with EBITDA back in the calculation, more of your interest expense is deductible. This especially benefits companies:

• Investing in equipment or facilities (high depreciation)

• Relying on patents, software, or brand value (high amortization)

• Backed by private equity or using debt to scale operations

While large companies drive headlines, middle-market firms with aggressive growth plans or recent capital investments are equally poised to benefit — if they act quickly.

How This Impacts Your Tax Strategy 

If you’re a CFO or tax executive, this isn’t just a policy footnote — it’s a planning opportunity. Here’s what you should assess right now:

1. Model Your EBITDA Versus Interest Exposure

Review your financials and calculate interest as a percentage of EBITDA. Even if you were under the earlier EBIT-based cap, rising interest rates may have brought you closer to the limit. With EBITDA, you could have new room to deduct more.

2. Re-Evaluate Capitalization and Asset Strategy

High depreciation and amortization are now helpful again. Consider whether capital expenditures or amortized IP assets (like patents or software licenses) can be timed or structured to further boost EBITDA.

3. Evaluate Foreign Income Impacts

Not all changes are favorable. The law also requires exclusion of certain foreign income and includes capitalized interest in deciding whether you’re over the cap. These nuances may reduce the benefit for some companies.

Which Industries Should Pay Close Attention?

This shift disproportionately benefits sectors where depreciation or amortization drives EBITDA higher, such as:

Manufacturing and Distribution

Heavy equipment investments often drive large depreciation. This change lets you deduct more interest related to equipment purchases, expansions, or upgrades. Explore our manufacturing solutions »

Life Sciences and Biotech

Drug and device companies with large IP portfolios now have more headroom to deduct interest — especially helpful if your company is scaling or recently completed an acquisition.

Technology

Amortizing intangibles like proprietary software and brand assets could boost EBITDA, giving you a wider deduction window — vital if your company used debt to fund growth.

Telecommunications

With substantial infrastructure depreciation, this rule is especially impactful. Businesses can now recapture deductions lost under EBIT rules.

What You Should Do Next

This is the time to:

• Re-model your tax position using EBITDA-based caps

• Reassess financing strategies considering increased deductibility

• Analyze carryforwards and future-year tax projections

• Revisit capitalization policies and M&A financing structures

Even if your interest expense is well below the cap today, this law creates a more favorable environment for future borrowing and investment.

How MGO Can Help

At MGO, we help mid-market companies translate complex tax changes into clear business advantages. Our tax professionals work with clients in manufacturing, life sciences, technology, cannabis, and other fast-evolving industries to build strategies that align with your capital structure and growth goals.

We go beyond compliance — helping you improve interest deductibility, forecast future liabilities, and stay ahead of shifting regulations. Let’s talk about how this change can strengthen your bottom line.

The post How Your Business Can Save Millions on Interest Deductions appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The One Big Beautiful Bill Act restores 100% bonus depreciation for qualified property placed in service after January 19, 2025.

• A new provision allows 100% expensing of qualified production property used directly in U.S.-based manufacturing, with strict eligibility criteria.

• Manufacturers should begin planning now to align construction timelines and tax strategy.

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The One Big Beautiful Bill Act (OBBBA) contains wide-reaching tax provisions that could reshape capital investment decisions for manufacturers and distributors. Two potentially impactful provisions are the return of 100% bonus depreciation and the introduction of a new incentive for qualified production property (QPP). For asset-intensive businesses, the new rules present significant planning opportunities.

This article outlines the OBBBA’s key bonus depreciation and QPP provisions, and how they apply to your manufacturing or distribution business.

100% Bonus Depreciation Returns in 2025

Bonus depreciation allows your business to immediately deduct a significant portion of the cost of qualifying property in the year it’s placed in service, rather than depreciating it over several years. Under prior law, bonus depreciation was gradually phasing down from 100% to 0% by 2027.

OBBBA resets that clock: For qualified property placed in service after January 19, 2025, 100% bonus depreciation is restored and made permanent. This applies to a wide range of capital investments — including machinery, equipment, and certain improvements to nonresidential real property.

However, for 2025, it’s crucial to keep the placed-in-service date in mind. Property placed in service on or before January 19, 2025, remains subject to the prior phase-down schedule (40% for 2025).

Bonus depreciation is generally automatic, meaning you need to elect out of it if you don’t want to take it. It’s available for both new and used property.

New: 100% Expensing for Qualified Production Property

In addition to bonus depreciation, OBBBA introduces a new, separate provision for 100% expensing of QPP with unique eligibility rules and timelines.

This is a major development if your manufacturing business is planning new facility construction, as bonus depreciation generally doesn’t apply to buildings (although it does apply to certain qualified improvements).

What Is Qualified Production Property?

Qualified production property includes a portion of nonresidential real property that is:

• Newly constructed in the United States

• Used as an integral part of manufacturing activities

• With construction beginning after January 19, 2025, and before January 1, 2029

• Placed in service before January 1, 2031

To qualify, the space must be used directly in the manufacturing process. The provision doesn’t apply to any square footage used for administrative offices, research and development, sales, or other ancillary functions.

Crucially, there is no de minimis exception — meaning there’s no threshold below which non-manufacturing space can be ignored. So even small areas used for offices or other non-manufacturing functions must be identified and excluded from the QPP calculation. This will likely drive demand for more detailed cost segregation studies to allocate building costs appropriately.

It’s also important to note that, unlike bonus depreciation, QPP expensing is not automatic. Taxpayers must affirmatively elect into this deduction. Final regulations will clarify how and when taxpayers must make the election and whether a single election applies across multi-year construction projects.

Who Qualifies?

This provision applies specifically to manufacturing businesses engaged in the production of tangible property involving “substantial transformation”. The IRS will issue regulations to define this standard more precisely, but the intent is to reward activities that significantly alter raw materials or components into finished goods.

Some exclusions apply. Lessors of the property and businesses preparing food and beverages on-site (such as a deli in a grocery store) are not eligible. Additionally, property subject to the alternative depreciation system (ADS) does not qualify.

A Word on Recapture

There’s also a 10-year recapture provision. If the use of the property changes during that period — such as converting a manufacturing area into administrative offices — the taxpayer may have to recapture the expensed depreciation as ordinary income under Section 1245.

Section 179: Increased Limits, but Strategic Considerations

OBBBA also raises Section 179 expensing limits. For 2025, your business can expense up to $1 million in qualifying property — with the deduction phasing out once total equipment placed in service exceeds $2.5 million. For assets placed in service after December 31, 2025, the expense limit increases to $2.5 million — with the deduction phasing out if total fixed assets placed in service exceed $4 million.

While small and mid-sized businesses often use Section 179 to write off qualifying property, it can be more limited in application than bonus depreciation (if available) since Section 179 is (a) limited to the amount of business taxable income; and (b) only available for assets used 50% or more for business purposes.

However, it may still be worth considering when bonus depreciation isn’t available or when coordination with taxable income limitations makes Section 179 more beneficial. There also may be benefits at the state level, as some states conform with the federal 179 expensing provisions while decoupling from federal bonus depreciation rules.

Taxpayers should discuss their fixed asset strategy with their advisors to decide how and when to leverage bonus depreciation, Section 179, and QPP expensing.

Implications for Manufacturing and Distribution

The manufacturing sector can benefit from these provisions with careful planning and implementation. Here are some decisions and considerations to discuss with your tax advisor:

1. Facility construction and expansions: The QPP rules reward businesses that start new construction after January 19, 2025, but before January 1, 2029. Companies on the fence may want to move quickly to meet the deadline and qualify for 100% expensing.

2. Cost segregation studies: Because only certain portions of a facility count as “qualified production property”, taxpayers will need cost breakdowns to support their deductions if any part of the building is used for non-qualified activities.

3. State conformity is uncertain: Some states may decouple from the federal rules, particularly for QPP expensing, given its potentially large impact on revenue. Businesses with operations in multiple jurisdictions will need to monitor state responses.

4. Private equity and tax-exempt complications: The use of ADS, especially when tax-exempt entities are involved, could disqualify certain projects from QPP expensing. Additional analysis will be required in joint ownership scenarios.

5. Recapture risk: Planning should also account for potential changes in facility use within the 10-year recapture window.

Looking Ahead

Bonus depreciation has been part of the tax code in various forms since 2001, but this is the first time it’s been made permanent. Meanwhile, the addition of a new QPP expensing provision clearly shows that the federal government wants to incentivize domestic manufacturing investment.

As with any major tax law, the details matter — and many remain forthcoming. We expect the U.S. Treasury Department and the IRS to release additional regulations clarifying key definitions, election mechanics, and compliance requirements.

In the meantime, manufacturers and distributors should begin evaluating capital plans for the next five years — especially if you are contemplating large-scale facility construction.

How MGO Can Help

At MGO, we help manufacturing and distribution companies identify opportunities and understand the potential tax outcomes. From evaluating capital investments to coordinating cost segregation studies and modeling the effects of federal and state tax treatment, we work alongside clients to support informed decision-making.

If you’re planning to expand or modernize your operations, our team can help you assess how these provisions apply to your business and align your plans with the latest tax laws. Contact us today to start the conversation.

The post Bonus Depreciation and Qualified Production Property: What Manufacturers Need to Know appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The new tax law permanently restores 100% bonus depreciation for qualified property placed in service after January 19, 2025.

• This change allows you to fully deduct eligible improvement costs upfront — improving cash flow and long-term planning.

• Real estate investors should watch for state-level differences and consider cost segregation studies to maximize the benefit.

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On July 4, President Donald Trump signed the One Big Beautiful Bill Act into law. Among the sweeping tax and spending provisions, one key change stands out for real estate investors: the return of 100% bonus depreciation.

Bonus depreciation is a powerful way to front-load deductions on qualifying property. Although it was first introduced in 2002 following the events of Sept. 11, the percentage deduction has varied over the years. Most recently, the 2017 Tax Cuts and Jobs Act (TCJA) increased bonus depreciation to a full 100% deduction. However, the TCJA also included a phasedown schedule — dropping the deduction to 40% in 2025 and eliminating it entirely by 2027.

Now, that phasedown has been reversed. The new law permanently restores 100% bonus depreciation for qualified property placed in service on or after January 20, 2025.

5 Ways the Return of 100% Bonus Depreciation Could Impact Your Strategy

If you’re investing in real estate, the return of 100% bonus depreciation creates new opportunities. Here are five ways it could affect your planning and cash flow moving forward:

1. You Can Plan Ahead With Certainty

For years, bonus depreciation rates have been a moving target. With this new law, you get consistency. Knowing that 100% bonus depreciation is now permanent gives you the ability to map out property improvements or acquisitions with a clear understanding of the tax impact. No more rushing projects to get ahead of a phase-down deadline. This is especially useful if you’re managing multiple properties or planning major capital expenditures.

2. Bigger Deductions Mean Better Cash Flow

Land improvements and qualified improvement property (QIP) — such as parking lots, landscaping, and interior upgrades to commercial buildings — are major expenses for real estate investors. With 100% bonus depreciation, you can deduct these costs in full the year they’re placed in service. That’s a non-cash expense generating real tax savings, freeing up cash you can reinvest into more properties, upgrades, or operations.

3. Bonus Depreciation Is Automatic — But You Still Have Options

The new law keeps the same framework: bonus depreciation is automatic unless you elect out. This means you don’t have to remember to file any special paperwork to claim the deduction. But if you’re planning to sell a property soon and want to avoid a large depreciation recapture, you still have the option to elect out of bonus depreciation for specific asset classes. That flexibility gives you more control over your long-term tax strategy.

4. Don’t Forget About State Taxes

While federal bonus depreciation is back at 100%, state treatment varies widely. Some states conform fully, others partially, and some not at all. Several states have flip-flopped in past years, some years complying with federal bonus depreciation rules and other years decoupling from the federal deduction, so it’s important to monitor changes over time. Failing to account for federal-to-state differences in depreciation can lead to surprises when filing your state returns. Work with a professional to stay ahead of shifting state policies.

5. Cost Segregation Studies Just Got More Valuable

With 100% bonus depreciation locked in, cost segregation studies are more useful than ever. These studies help you identify components of your property — like lighting, flooring, plumbing, land improvements and specialty electrical systems — that can be depreciated over five, seven, or 15 years instead of the standard 39 years or 27.5 years for residential real estate. That makes more of your investment eligible for immediate expensing. If you’re buying, renovating, or developing commercial or residential property, a cost segregation study could lead to substantial tax savings (use our cost segregation assessment tool to see if you could benefit).

Increased Opportunity and Complexity for Real Estate Investors

The return of 100% bonus depreciation is big news for real estate investors. It gives you stronger cash flow, more predictable planning, and powerful incentives to invest in and improve your properties. But it also adds complexity — from deciding when to elect out to understanding how state rules diverge from federal law.

How MGO Can Help

Our Real Estate team is ready to help you take full advantage of the new bonus depreciation rules. Whether you’re planning improvements, exploring a cost segregation study, or preparing for a property sale, we’ll work with you to uncover tax-saving opportunities and support your long-term investment strategy.

Reach out today to start planning your next move.

The post What New Bonus Depreciation Rules Mean for Real Estate Investors appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• IRS downsizing is causing backlogs, misapplied payments, and delayed tax determinations. 

• Fewer auditors mean more correspondence exams, and an increased taxpayer burden on you. 

• Appeals and Advocate Services are overwhelmed, requiring professional tax support. 

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Recent IRS downsizing efforts have posed challenges for taxpayers attempting to resolve issues with the agency. Over recent months, thousands of IRS employees have left the IRS through the administration’s deferred resignation programs, comprehensive layoffs of probationary employees, and retirements. Reductions not only affect processing and service centers but also impact personnel who are part of the IRS’s Taxpayer Experience Office, Taxpayer Advocate Service, IRS Office of Appeals, and IT modernization staff — all departments that exist to assist taxpayers with navigating complex U.S. tax compliance issues and IRS controversies. As of the current date, it remains unclear whether the IRS will be safe from further staffing cuts. What’s more, IRS employees are voluntarily resigning, often as a result of increasing uncertainty within the agency.  

While the ultimate goal of the downsizing is to enhance the IRS’s efficiency through automation and streamlined operations, taxpayers should be prepared to encounter administrative and logistical challenges when dealing with the agency as it settles into new processes with fewer personnel. These challenges include: 

•     Processing backlogs  

•     Unapplied tax payments 

•     More correspondence exams 

•     Appeals resolution issues 

•     Delayed determination letters 

•     Taxpayer Advocate Service delays 

Routine processing backlogs.

 Processing of routine tax filings such as original and amended returns, refund claims, and requests for appeals consideration may be delayed due to fewer IRS staff. These backlogs may also lead to delays in the IRS issuing much needed tax refunds to taxpayers.  

Longer processing times may also expose certain taxpayers to operational disruptions. The IRS may, for example, delay the processing of a business taxpayer’s request to change its legal entity name by several months. As a result, the taxpayer’s customers and vendors might be reluctant to remit payment to the newly named entity because its entity name for legal purposes does not match IRS records. 

Unapplied tax payments and payments made by consolidated subsidiaries. 

In certain cases, the IRS is failing to apply or is misapplying taxpayers’ payments. A taxpayer may, for example, remit payment to the IRS to offset its 2024 income tax liability, then later determine the IRS never withdrew the funds from its account or applied the payment to the wrong year. The IRS may fail to apply or misapply a taxpayer’s payment without notification to the taxpayer, causing late payment penalties and interest to accrue without the taxpayer’s knowledge.   

Recently, tax payments made by a consolidated subsidiary on behalf of its parent corporation have triggered automatic notices from the IRS demanding the associated tax return. In these cases, the IRS apparently has not associated the payment with the parent’s consolidated return, even though the subsidiary and the payment are properly reported on Form 851. As a result, consolidated filers must dedicate resources to clearing IRS requests for income tax returns from subsidiaries with no filing requirements. 

More correspondence exams. 

As part of the agency’s recent downsizing, the IRS has lost approximately one-third of its auditors. Although fewer auditors may lead to fewer in-person audits, it also may mean more audits are conducted entirely via computer system and by mail, with taxpayers unable to speak directly to a live revenue agent. This type of audit, known as a correspondence exam, often leads to a lack of clarity for the taxpayer and the IRS incorrectly adjusting items on a taxpayer’s return even when the taxpayer has the relevant documentation to support the return as filed. In these cases, the only resolution may be for the taxpayer to file a petition with the Tax Court, which is expensive and often more costly than the tax adjustment itself. 

Appeals resolution issues. 

The IRS Office of Appeals has lost hundreds of employees in the downsizing, all while dealing with an increasingly complex workload. The number of Appeals cases is expected to further increase due to errors and disputes resulting from the loss of qualified personnel in other areas of the IRS.  

As a result, taxpayers can anticipate the Appeals process will take longer. Unfortunately, this may result in more taxpayers taking issues to litigation, thus burdening the federal court system. Taxpayers that need to take issues to Appeals should consider the benefits of engaging a professional advisor to assist and advocate for them throughout the Appeals process. 

Delayed determination letters

Entities applying for tax-exempt status may have to wait longer periods to receive their IRS determination letters. These entities, which are required to electronically file Form 990, will not be able to properly file Forms 990 until the determination letter is issued, resulting in IRS-assessed late filing penalties.   

Contacting the Taxpayer Advocate Service. The Taxpayer Advocate Service (TAS) is also dealing with the separation of hundreds of employees. TAS is an independent office within the IRS that helps taxpayers resolve errors the IRS processing centers cannot or will not resolve on their own. An increase in errors made by the IRS due to the downsizing has also led to an increase in taxpayer assistance requests of TAS. Although traditionally effective at expediting the resolution of errors, TAS representatives may become increasingly difficult to reach due to the recent reduction in qualified personnel along with the increase in requests for assistance. This may mean issues require more time to resolve or even go unaddressed, with taxpayers potentially requiring assistance from professional advisors to reach a resolution.  

Written by Todd Simmens, Kate Pascuzzi and Nicolas Read. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com 

Proactive Support for a Changing IRS Landscape 

At MGO, we help clients proactively manage the evolving IRS landscape. As taxpayer services become slower and more complex, our tax advisors offer strategic guidance and hands-on support to resolve IRS disputes, appeal unfavorable outcomes, and minimize compliance risks. Whether you’re facing delays, audits, or misapplied payments, we advocate on your behalf to bring clarity and resolution. With deep experience navigating federal tax bureaucracy, we ensure your case is handled efficiently — even as IRS resources shrink. Contact us to learn more.

The post The IRS is Downsizing — What Taxpayers Can Expect  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Live streamers are evolving into powerful digital brands, and managing your growth like a business is essential for long-term success.

• To stay financially healthy, you need to separate personal and business finances, track all income sources, and budget for quarterly taxes and year-end planning.

• Having professional support can help you make smarter decisions, handle unpredictable income, and turn short-term wins into sustainable growth.

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Live streaming is more than a trend — it’s a movement. Platforms like Twitch, YouTube Live, Instagram Live, and TikTok are turning everyday creators into digital stars by allowing real-time interaction with fans. And thanks to the ability to repurpose and share live content across multiple platforms, your audience isn’t just watching — they’re building a relationship with you.

That connection is powerful. Whether you’re streaming gameplay, makeup tutorials, or experiences in haunted houses, live streaming is reshaping how audiences engage with content. But, as your following grows, your responsibilities grow with it. You’re not just entertaining anymore — you’re building a brand. So how do you make the most of your momentum?

3 Questions Every Live Streamer Should Be Asking

If you’re serious about turning your streaming success into a real business, these are the questions that can shape your future — creatively and financially:

1. How Can I Monetize My Content and Grow My Business?

You’ve got the audience — now it’s time to turn your stream into a business. The good news is, you’re not waiting for a record deal or TV contract. You have direct access to revenue streams like ad revenue, subscriptions, sponsorships, merch, and even licensing deals. That gives you full control — but also full responsibility.

Growth doesn’t just mean more followers — it means building a sustainable business. That starts with thinking like a brand. Top streamers are forming business entities, tracking income and expenses, and hiring teams to handle editing, scheduling, and outreach. And they’re diversifying beyond just one platform — because relying on an algorithm is risky. Building direct-to-audience channels like newsletters or merch stores can create more stable income streams and reduce platform dependence.

Learn more about how you can take control of monetization.

2. What Am I Missing When It Comes to Taxes and Accounting?

If you’re earning money from your content, you’re running a business — and that means you likely owe taxes, whether you’re aware of them or not. It’s helpful to track expenses and delineate between your business and personal finances. Use dedicated accounts for income, expenses, taxes, and savings. By doing this, it keeps things cleaner for tax reporting and helps you see the full picture in an organized way.

Also, keep detailed records. That includes ad revenue, sponsorships, “gifts” from brands (which are often taxable), merch income, and even crypto or NFTs. Many creators miss out on valuable deductions for equipment, software, and home office use — all of which can reduce your tax bill. And don’t forget to plan (or save) for tax payments. In certain cases, you may need to pay the IRS quarterly or during year-end planning. A sudden spike in income without proper planning could mean trouble down the road.

Get 10 vital tax and accounting tips every creator need to know.

3. Do I Need a Business Manager?

The moment your income becomes unpredictable, inconsistent, or complicated — it’s time to bring in help. A business manager acts as your personal CFO, handling everything from bill payments and budgeting to tax planning, investment vetting, and estate strategy. They free you up to focus on creating while managing the financial foundation of your career.

It’s not just about managing success — it’s about preparing for what’s next. Business managers help smooth out income peaks and valleys, forecast future needs, and protect against costly mistakes. Whether it’s helping you avoid a bad investment, forming a business entity, or simply translating what your earnings really mean after fees and taxes — they’re there to protect your interests. Bringing one on early in your journey can help you build good financial habits from the start.

Find out why every entertainer needs a business manager.

Turn Your Streams Into a Sustainable Business

You’re not just creating content, you’re running a business. That means thinking beyond daily views and focusing on long-term goals. Whether you’re looking to increase revenue, navigate taxes, or plan for the future, our dedicated Entertainment, Sports, and Media team provides the financial guidance you need. Reach out to our team today to find out how we can help you take your business to the next level.

The post Live Streamers: Are You Managing Your Business Like a Pro? appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Professional athletes need a comprehensive financial team — including business managers, accountants, tax specialists, and consultants — to manage their complex financial lives.

• Your financial front office provides critical visibility into your finances, prevents potential problems before they arise, and creates a coordinated strategy across all aspects of your wealth management.

• While you may only interact with one or two people on your financial team, there should be an entire network of professionals working behind the scenes to protect your wealth and secure your future.

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Behind every winning team in pro-sports is a strong front office. From the general manager to the scouts, trainers, and analysts, each person plays a critical role in a team’s success. But what about your personal financial team? As a professional athlete, you need an equally robust front office of your own to manage your finances and secure your future.

The Game Changes When the Checks Get Bigger

When you sign that first contract, everything changes. Suddenly, you may be dealing with more money than you’ve ever seen before. You’re getting big paychecks coming in, but also big expenses going out — including taxes, which nobody likes to think about.

It’s a common misconception to think: “I make a million dollars, so I can spend a million dollars.” In reality, that million might actually be $600,000 or less after taxes. Without proper financial management, you can quickly find yourself in trouble.

Your Financial Front Office Lineup

Just as you wouldn’t play without a complete team on the field, you shouldn’t manage your finances without a complete financial team. Here’s who should be in your financial front office:

Business Manager

Think of your business manager as the quarterback or point guard of your financial team. They coordinate everything and serve as your primary point of contact. They handle:

• Bill payments and expense management

• Budgeting and financial projections

• Cash flow analysis

• Personal CFO services

• Coordination with other financial professionals

Your business manager is the person you go to for everything financial. They provide a “seamless experience” by coordinating with all the other specialists working on your behalf.

Accounting Team

Behind the scenes, you need strong accountants who specialize in providing visibility into your financial world. These professionals handle:

• Consolidated financial statements for both personal and business accounts

• Monthly cash flow reporting

• Real-time financial visibility

• Tracking all financial activity across your accounts

The accounting team picks up all the activity in your financial universe — the salaries coming in, all the expenses going out on your credit cards, bank accounts, brokerage accounts, etc. — making sure that it’s all captured in one place.

This financial visibility is crucial. You receive comprehensive reports showing exactly where your money is coming from and where it’s going. This real-time tracking allows you to make adjustments before problems arise.

Tax Team

Tax planning is critical for professional athletes. Your tax team handles:

• Income tax preparation and estimated tax payments

• Multi-state tax compliance (crucial for athletes who play in multiple states)

• Entity structuring (including “loan-out” companies)

• Tax strategies for salaries, bonuses, and endorsement deals

• International tax planning

For athletes, tax planning is complex. You’re often earning income in multiple states and through different channels. Without proper tax planning, you could face significant penalties and unexpected tax bills.

Specialty Consulting Services

Depending on your needs, your financial front office might include professionals who can assist you in areas like:

• Brand licensing, publishing, and royalty consulting

• Name, image, and likeness (NIL) planning

• Insurance and risk management

• Film, TV, streaming, and media production

Much like position coaches who focus on specific aspects of your game, these professionals provide knowledge and experience when and where you need it.

The Benefits of a Complete Financial Front Office

Here’s what you gain from having a full team working behind the scenes for you:

1. Financial Visibility and Control

Perhaps the most important benefit is having complete visibility into your financial situation. Until you see it on paper, it’s hard to really understand how much is entering and leaving your bank account on a regular basis.

With monthly reporting, you can see exactly where your money is going — allowing you to make informed decisions about your spending and saving.

2. Proactive Problem Prevention

Your financial team can identify potential issues before they become problems. If your spending starts to exceed your income, your business manager can have a conversation with you about adjusting your habits.

In some cases, they might recommend specific monthly spending caps to help you maintain positive cash flow.

3. Coordinated Financial Strategy

With everyone working together, you get a coordinated approach to your finances. Your business manager ensures your accounting team has all the information they need, which then provides your tax team with accurate data for tax planning.

This coordination is seamless to you — you have one point of contact who manages everything behind the scenes (your business manager), but you benefit from the specialized expertise of each team member.

4. Relief from the Burden of Financial Management

Perhaps most importantly, a financial front office frees you to focus on what you do best: play your game. You don’t have to worry about paying bills, tracking expenses, or preparing for tax season. Your team handles it all, giving you the mental space to excel in your career.

The Invisible Gears of Your Financial Watch

Your financial front office works like a precision watch. You might only see the time (the final reports and recommendations), but behind the face is a complex system of gears working together. While you may only touch base with one or two people, there are several different teams of people — business management, accounting, tax, consulting — working on your behalf.

This behind-the-scenes work keeps everything running smoothly, even if you don’t see all the moving parts.

Build Your Winning Team with MGO

Our dedicated Entertainment, Sports, and Media team understands the unique financial challenges professional athletes face — multi-state income, endorsement deals, loan-out companies, and a career span that requires careful planning. From business management to tax, accounting, and consulting, our experienced professionals work together seamlessly to provide the support you need at every stage of your career.

With our team as your financial front office, you can focus on winning on the field while we take care of the rest. Contact us today to learn how we can customize our services to your needs and goals.

The post Why Every Pro Athlete Needs a Financial Front Office appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• A business manager helps you stay focused on your creative career by handling the financial and logistical complexities that come with success in entertainment.

• From budgeting and tax strategy to international compliance, risk management, and investment vetting, business managers protect your earnings and help you plan for both boom years and dry spells.

• Whether you’re just starting out or managing major deals, a business manager is key to building long-term financial stability and turning fame into lasting wealth.

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Success in the entertainment industry can be thrilling — and fast. One day you’re auditioning and hustling, and the next you’re signing your first major deal. But with that success comes complexity. Contracts. Cash flow. Taxes. Big purchases. Bigger risks.

That’s where a business manager becomes indispensable.

If you’re a working entertainer — whether as an actor, director, writer, producer, or content creator — you need someone watching your financial back so you can focus on what you do best. A business manager isn’t just a luxury for the elite; it’s a critical support system that helps turn career momentum into long-term financial security.

8 Reasons Business Managers Are Essential for Entertainers

Once the wheels on your career start rolling, here’s why you want a business manager in your corner:

1. Handle the Business So You Can Stay Creative

Entertainers are visionaries. But managing day-to-day expenses, long-term financial goals, and tax obligations requires a different skill set — and a lot of time. Business managers act as your financial quarterback, helping you handle:

• Bill payments and banking

• Budgeting and cash flow planning

• Major purchases like homes and cars

• Tax strategy, compliance, and filings — domestically and internationally

• Collaborating with your advisory team on investment opportunities and due diligence

• Team coordination with attorneys, agents, and financial advisors

• Estate planning

While you focus on your craft, a business manager helps maintain the structure behind the scenes — aligning your lifestyle and spending habits with your income and goals.

2. Get a Head Start, Not a Headache

The best time to bring on a business manager isn’t when you’ve made it big. It’s before that.

Many entertainers see an influx of income early in their careers — sometimes unpredictably and in large amounts. Without someone helping build a solid financial plan from the start, it’s easy to overspend or mismanage resources.

Even earning a couple hundred thousand dollars or working in a different state or country can create tax complexities or prompt decisions — like forming a business entity — that require guidance. Having a manager early on helps build good financial habits and prepare for income fluctuations, which are common in this industry.

3. Understand What You’re Really Earning

You might sign a million-dollar deal — but that doesn’t mean you take home a million dollars. After agent commissions, legal fees, business management, taxes, and other deductions, the actual net income could be closer to 35 to 40 cents on the dollar.

That’s a surprise most entertainers don’t see coming.

A business manager helps break down what your deals really mean for your bottom line. They plan for taxes, track spending, and project income and cash flow over time to keep you financially stable — especially in the off-seasons when work slows or stops altogether.

4. Plan for Peaks and Valleys

Every career has its highs and lows, but in entertainment, those extremes can be particularly wide. A steady year might be followed by months with no income at all. Think writer’s strikes. Production shutdowns. Or just a natural lull between projects.

A business manager builds financial plans to help weather those dry spells — so you’re not scrambling when the checks stop. That might include:

• Setting aside emergency funds

• Balancing liquid versus long-term investments

• Evaluating major purchases relative to available cash

• Forecasting income needs for 3–5 years

Rather than letting a peak year prompt a rash decision — like buying a multi-million-dollar house — a business manager helps align your lifestyle with your financial reality.

5. Protect Against Costly Missteps

When your name is in the credits (or trending on social media), investment pitches will follow. Some may come from friends. Others may seem like can’t-miss opportunities. But not all that glitters is gold.

One of the most common mistakes entertainers make is jumping into investments without proper vetting. Business managers step in to help with due diligence — researching deals, reviewing contracts, and bringing in attorneys or financial advisors when necessary. Their job is to help protect your wealth from risky decisions and align your investments with your long-term goals.

They can also help make sure you have contracts in place for domestic staff and other personal service providers — protecting your privacy, minimizing liability, and helping you avoid costly disputes down the road.

6. Build the Right Team — and Lead It

Think of a business manager as your in-house CFO. But unlike a solo act, they don’t work in isolation. They coordinate with everyone on your team — agents, attorneys, financial planners, insurance brokers — to make sure all aspects of your financial life are connected.

A good business manager doesn’t just generate reports and process numbers — they act as a strategic advisor with your best interests at heart. That includes regular communication, personalized advice, and a clear understanding of your financial picture.

When evaluating a potential business manager, ask:

• How often will we communicate?

• What kind of reports or updates will I receive?

• How will you help me make financial decisions?

• Can you work with the other professionals on my team?

The right manager should not only be qualified — but committed to helping you succeed beyond the next paycheck.

7. Look Out for Your Best Interests

The best business managers aren’t just number crunchers — they’re protectors. That means spotting red flags before they become problems, like making sure your employees are logging a lunchtime break if they work more than five hours.

It also means stepping up during emergencies — whether that’s getting you a last-minute hotel extension during the California wildfire evacuation or being the first to coordinate with your insurance broker to fast-track your claim.

Your business manager is often the first person you call when something goes wrong — and the one quietly making sure it doesn’t.

8. Set the Foundation for Long-Term Success

At the end of the day, fame and fortune don’t guarantee financial security. But with the right guidance, they can become the foundation for lasting wealth and freedom.

A business manager helps you:

• Navigate complex income structures and tax issues

• Build a spending and savings plan that reflects your reality

• Avoid costly financial traps

• Assemble a trustworthy advisory team

• Plan for the future — even when the future is uncertain

Whether you’re landing your first breakout role or headlining your fifth series, a business manager helps translate your creative wins into a secure, stable, and fulfilling financial future.

In a world where so much is unpredictable, that’s a role every entertainer needs.

How MGO Can Help

As a full-service CPA and consulting firm with a dedicated Entertainment, Sports, and Media practice, we bring a level of depth that goes beyond the typical business management firm. That means when you’re launching a production company or heading overseas for a tour, you get access to a national network of tax, audit, and consulting professionals.

Need help navigating California’s tax structure? Our state and local tax team is on it. Filming in Europe? Our international tax professionals can help you plan proactively. That kind of integrated support is what makes MGO different, and it’s why so many entertainers choose us to meet their long-term financial needs.

Reach out to our team today to find out how we can help you protect, grow, and oversee your money — wherever your career takes you.

The post Why Every Entertainer Needs a Business Manager appeared first on MGO CPA | Tax, Audit, and Consulting Services.