Tax Changes in the Big Beautiful Bill: What Farmers Need to Know

By Samantha Gehrett

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, marks one of the most comprehensive tax reforms in decades. For farmers and ranchers, this legislation isn't just political news; it's a practical guide for shaping financial decisions, succession planning, and long-term investments. Below, we break down the key provisions that matter most to agricultural producers and explain how they fit together.

A New Era for Farm Investment: Section 179 and Bonus Depreciation

Among the most farmer-friendly changes in OBBBA are the expansion of Section 179 expensing and the restoration of 100% bonus depreciation. These provisions allow producers to deduct the full cost of qualifying property in the year it's placed in service, rather than spreading deductions over several years.

• Section 179 deduction rises to $2.5 million, with a phase-out threshold of $4 million.
• Bonus depreciation is restored to 100% for qualified property placed in service after January 19, 2025, through 2030.

For farmers, this is a game-changer. For example, if you purchased a $500,000 combine in 2025—you can deduct the entire amount in the first year, freeing up cash flow for other operational needs.