There have been many headlines regarding the One Big Beautiful Bill (BBB) that was passed on July 4th, 2025. With so many headlines, it can be challenging to understand how this will affect the ag market.
Many of our customers are farmers who require a farm shop or cold storage building to store their equipment and operate their businesses. How will this affect your business taxes for 2025 and beyond?
In this blog, we will break down the six ways the big beautiful bill helps farmers starting in 2025!
What's more is that the 100% bonus depreciation is made permanent. For qualifying property, this allows farmers to deduct the full cost of major investments in the year they're placed into service.
This means if you have been putting off building a new agriculture shop or cold storage shed, 2025 is your year to build. You will be able to write off 100% of your pole barn this year, without it being deducted over several years. That results in more money in your pocket in the long run and upgrades to your operation sooner.
The BBB Act increased the Death Tax exemption to $15 million per individual or $30 million per couple, adjusted annually for inflation. This means if the value of your farm or ranch plus equipment, cattle, and other assets is less than $15 million individually or $30 million as a couple, you will pay no Death Tax.
Without this bill, the tax exemption was set to drop back to $5.5 million after 2025. This would have threatened family farms with large tax burdens. By locking in a higher, inflation-adjusted exemption, the bill helps protect generational farm transfers, reducing the risk of land sales to cover taxes.
When tax season rolls around, you may be in for a pleasant surprise. The changes in taxes don't stop at tax credits, the Section 179 deduction, or inheritance taxes. The new bill also has additional benefits for farmers and individuals.
The bill also brought the following tax changes:
If you work on a neighbor's farm or agritourism farm for additional income, there is now no tax on tips or overtime (based on income levels).
If you are a parent who has children under 17, you might be excited to learn that this bill increased the child tax credit.
Additionally, Section 199A made the 20% small business deduction permanent, allowing farmers to deduct a portion of their business income.
Getting started in farming is not a cheap investment. There is a significant risk associated with purchasing equipment, renting or buying a pole barn to store supplies, and taking out loans for thousands of dollars, all while hoping that the crops will grow and that you won't encounter any major problems during planting or harvesting.
In the past, young farmers were at a disadvantage when it came to base acres. These are calculated based on the USDA's record of historic use of the land to produce eligible crops. Typically, beginning farmers operate on limited base acres, which makes them ineligible for Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC).
With the new BBB Act:
Whether your farm experienced the 2020 derecho or flooding in 2024, disasters can happen. With the new BBB Act, additional program extensions and expansions are in place to help farmers in the event of loss.
The bill extends the Price Loss Coverage (PLC), Agricultural Risk Coverage (ARC), and Dairy Margin Coverage (DMC) programs through 2031. With Increased PLC yield, the potential payment per acre increases. For example, corn EFR increased to $0.16, with an estimated PLC yield of 175 bushels per acre, resulting in $28 per acre.
Additionally, crop insurance subsidies increase by 3-5%, with 10-year premium support available for beginning farmers. In addition, a new poultry insurance pilot program was introduced to protect against extreme weather-related events.
The BBB increased reference prices for crops from 10 to 21 percent! These reference prices, used to calculate crop insurance benefits, will be increased to the previous crop year's reference price multiplied by 1.005, with the caveat that the new price cannot exceed 113 percent of the reference price.
For example, corn, which was $3.70/bu, would now be $4.10/bu. Beginning with the 2031 crop year, the stated reference price would increase each year by .5 percent.
According to the National Cattlemen's Beef Association, the Big Beautiful Bill brought additional benefits for livestock producers.
One of the controversial aspects of the bill is the cuts to clean energy. This eliminates renewable energy credits, such as those for electric vehicles. The concern from supporters is that emissions were projected to drop by 40% by 2023, but are now projected to decrease only 3%.
However, the bill does extend funding for advanced biofuels. Additionally, it extends research funding to projects such as specialty crop research and grants for animal disease prevention and management.
Furthermore, funding was granted until 2031 for conservation programs such as:
While most farmers may not be driving a Tesla, they are familiar with windmills and solar farms that are popping up. The government tax incentives for wind, solar, and electric vehicles are being phased out, and funding is now in place for biofuels and research to support the future of agriculture in America.
The One Big Beautiful Bill delivers real, timely relief. Whether it's financing a new agriculture building, getting started as a beginning farmer, or passing land to the next generation, this bill helps ensure that agriculture remains strong, resilient, and ready for the future.
Disclaimer: This information is to inform, but does not provide legal advice. Please consult with your tax representative for what is best for your operation. Note that an S corporation (S corp) vs. a C corporation (C corp) may qualify for different tax advantages.
Do you have more questions that aren’t covered in this article? If you need help designing and planning, please contact FBi Buildings at 800.552.2981 or click here to email us. If you’re ready for a price, click here to request a quote, and a member of our Customer Engagement Team will help you determine the next steps.