How the New “One Big Beautiful Bill Act”

Legislative changes can feel like storms on the horizon — if you wait until they hit, you’ll be scrambling. But if you prepare ahead, you can use those changes to your advantage. The One Big Beautiful Bill Act (OBBBA), signed into law in 2025, brings sweeping tax reforms. For entrepreneurs and business owners, it’s not just about compliance — it’s a chance to reposition, optimize, and thrive.

What Is the OBBBA?

• The OBBBA (sometimes referred to as the “Big Beautiful Bill”) is major tax legislation passed in July 2025. Wikipedia+2Thomson Reuters Tax+2

• It extends, modifies, or makes permanent many of the changes introduced in the 2017 Tax Cuts and Jobs Act (TCJA). Wikipedia+3Thomson Reuters Tax+3H&R Block Tax preparation company+3

• It also introduces new provisions — from overtime and tip deductions to expanded deductions for business investments and adjustments to international tax rules. Labor & Employment Law Blog+3Henson Efron – Minneapolis Law Firm+3McDermott+3

Key Provisions That Matter Most to Business Owners & Entrepreneurs

Here’s a breakdown of changes that most directly affect your business and tax planning:

Provision What Changes Why It Matters / What You Should Do

100% Bonus Depreciation / Expanded Section 179 The OBBBA reinstates full bonus depreciation Accelerated write-offs improve cash flow. (100% expensing) for qualifying property placed purchases (equipment, software, new The Section 179 deduction limit is increased facilities), time them carefully to maximize in service after January tax benefit. in service after January 19, 2025.
The Section 179 deduction limit is increased (to $2.5M) with the phase-out threshold moved to $4M

Domestic Research & Experimental (R&D) Expensing Domestic R&D (including software) can now If your business invests in innovation, you be fully expensed (rather than amortized) for now deduct those costs more aggressively. tax years beginning after Dec. 3, 2024 Evaluate whether to amend past returns. Interest Deduction / Section 163(j) Changes The formula for calculating the business For leveraged businesses, more interest interest limit (Section 163(j)) is adjusted: might become deductible. Review depreciation and amortization (DA) are now your debt structure and interest allocations included back in calculating “adjusted taxable income” (ATI)

Passthrough / QBI Deduction (Section 199A) The 20% Qualified Business Income (QBI) If your business is an S-Corp, LLC, deduction is made permanent. or partnership, the QBI deduction Meanwhile, new ceilings, income thresholds, remains a powerful tool. But changes in and clarifications are introduced. income thresholds or structural complexity may affect your planning.

SALT Deduction Cap Temporarily Raised From 2025 through 2029, the cap on state and For businesses in high-tax states, this offers local tax (SALT) deductions is increased from some relief at the personal level (if you $10000 to $40,000 (with phase-outs beyond itemize) SALT strategy should be revisited. certain income levels).

New Deductions (Tips, Overtime, For tax years 2025–2028, taxpayers may For owner-employees and small businesses, Auto Loan Interest) for U.S.-assembled vehicles these new deductions may shift how (up to $10,000) may also be deductible. compensation and expense structuring is handled. Pay attention to documentation and limitations.

Charitable Contributions / Corporate Limits Corporations will only be able to deduct charitable If your business regularly makes charitable contributions that exceed 1% of taxable income If your business regularly makes charitable (with a 10% ceiling) for years beginning after gifts, revisit your giving strategy to ensure Dec. 15, 2025. compliance.

Estate & Gift Tax Exemption Increase Starting in 2026, the estate and gift tax exemption For business owners planning succession is raised to $15 million per decedent, indexed or intergenerational transfer, this injects for inflation. more leeway. Review your estate and transfer strategies.

Final Thoughts

The OBBBA is one of the most transformative tax laws in nearly a decade. For entrepreneurs, it’s not just a compliance issue — it’s a strategic inflection point. Those who prepare thoughtfully now will read advantage into the changes; those who delay may feel the squeeze later.