What is Adjusted taxable income (ATI)?

Adjusted taxable income (ATI) is the income figure used under Section 163(j) to set the 30% cap on deductible business interest. The One Big Beautiful Bill Act permanently restores an EBITDA-based ATI formula, adding back Depreciation and amortization before applying the limit. This raises the deduction ceiling for capital-intensive businesses and reduces disallowed interest carryforwards compared to the EBIT formula in effect from 2022 through 2024.

Related Terms

What is Business interest limitation?

What is Adjusted gross income (AGI)?

What is a Net operating loss?

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Tax loss harvesting

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Child traditional IRA

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Child & dependent tax credits

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Employee achievement

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Hiring kids

Reduce taxable income & self-employment tax by hiring your kids.

Home office

Deduct qualified expenses for using your home for business purposes.

Meal expenses

Business can typically deduct 50% of meals associated with doing business with some cases allowing up to 100% deduction.

Travel expenses

Businesses can deduct necessary travel expenses, like airfare and lodging, directly related to operations for tax savings.

Vehicle expenses

Vehicle tax deduction allows deduction of business vehicle expenses, using a per-mile rate or actual costs, from taxable income.

Late S election

A Late S Election lets a corporation request IRS S corp status post-deadline.

Late C election

A Late C Election is a request to the IRS for C corporation status after the deadline.

Depreciation

Put your fixed assets to work for you by utilizing depreciation to find and compare tax savings in minutes.

R&D tax credit

Fuel your venture's growth and innovation with the R&D tax credit. Not just for tech firms or big corporations.

Clean vehicle

Businesses and Individuals can receive a tax credit for purchasing new eco-friendly vehicles. Individuals may also qualify on used eco-friendly vehicles.

Residential clean energy

Taxpayers who invest in renewable energy improvements for their home or second home may qualify for a credit to lower their income tax.

Augusta rule

The Augusta Rule lets homeowners rent their property tax-free for up to 14 days a year without reporting the income.

Roth 401k

Roth 401(k) lets employees and individuals make after-tax retirement contributions, offering tax-free growth and withdrawals.

Traditional 401k

Traditional 401(k) plans offer pre-tax retirement savings for employees, with companies reducing taxable income via contributions.