The One Big Beautiful Bill Act, signed into law on July 4, 2025, brings sweeping changes to the U.S. tax code, particularly for businesses of all sizes. Designed to stimulate investment, innovation, and domestic production, the bill includes a wide range of tax provisions aimed at reducing burdens on employers, pass-through entities, manufacturers, and startups.

Below is a detailed summary of the key business tax provisions in the act and what they may mean for your bottom line.

Capital Investment & Depreciation

• 100% Bonus Depreciation (Full Expensing)
  • Permanently allows full expensing for business property (new or used) placed into service after January 19, 2025, eliminating previous phase-out schedules.
  • Includes “qualified production property”—nonresidential real estate used in manufacturing—placed in service by 2030/2031.
• Section 179 Expensing
  • Increases the deduction limit to $2.5 million, with a phase-out threshold of $4 million (indexed for inflation), expanding immediate write-off capability for small to mid-sized businesses.

Research & Experimental (R&E) Expenses

• Businesses may immediately deduct domestic R&E expenses incurred after Dec 31, 2024.
• Small businesses (typically < $31 million in gross receipts) can retroactively apply the deduction to tax years from 2022, with accelerated options for unamortized expenses from 2022–2024.

Qualified Business Income (QBI) Deduction—Section 199A

• The 20% QBI deduction is now permanent for pass-through business income.
• Phase-in thresholds raised to $75,000 (single) / $150,000 (joint), with a $400 minimum deduction for qualifying active business income.

Business Interest Expense Limitations

• Restores the EBITDA-based limitation (favoring higher interest deductions), effective for tax years starting post-2024.
• Notably excludes depreciation, amortization, and depletion from the adjusted taxable income base.

Qualified Small Business Stock (QSBS)

• Enhances QSBS taxpayer benefits for shares issued after July 4, 2025:
  • Gross asset limit raised to $75 million.
  • Exclusion gain cap increased to $15 million, indexed for inflation.
  • Holding period-based exclusions: 50% exclusion at 3 years, 75% at 4 years, and 100% at 5+ years.

Advanced Manufacturing Investment Credit

• Increases the credit rate to 35% (up from 25%) for eligible manufacturing property placed in service after December 31, 2025.

Charitable Contributions Deduction (Corporate)

• Sets a 1% floor on allowable corporate charitable deductions (with existing 10% cap).
• For individuals, a 0.5% floor applies for itemizers—making smaller contributions non-deductible.

Excess Business Loss Limitations (EBL)

• The TCJA’s limit on noncorporate excess business losses is made permanent, with disallowed losses treated as NOLs.

Opportunity Zones & New Markets Incentives

• Qualified Opportunity Zones made permanent, with new rural-focused benefits and a second designation cycle starting 2027.
• New Markets Tax Credit also made permanent.

Employer-Specific Tax Benefits

• Paid Family & Medical Leave Credit (Section 45S) becomes permanent and is expanded to include insurance premiums.
• Employer-Provided Child Care Credit (Section 45F) increased to 40% of eligible expenses (cap $500K; $600K for small businesses), and indexed for inflation post 2026.
• Employer student loan assistance exclusion is made permanent, with inflation adjustments starting in 2026.

Clean Energy Tax Incentives & Green Programs

• Repeals or phases out several clean energy incentives from the Inflation Reduction Act:
  • Qualified commercial clean vehicle, alternative fuel refueling, and energy-efficient building credits.

Other Noteworthy Provisions

• SALT Deduction Cap Increase to $40,000 (phasing out for high earners), effective 2025–2029.
• Third-Party Reporting Thresholds restored to $20,000/200 transactions for Form 1099-K, and $2,000 for other payments.

Summary Table

Area	Key Provision
Capital Expenditures	Permanent 100% expensing, higher Section 179 limits
R&E Costs	Immediate expensing; retroactivity for small businesses
Pass-Through Deduction	Permanent 20% QBI deduction with expanded phase-out thresholds and minimum
Interest on Business Loans	Favorable EBITDA-based interest deduction rules
QSBS	Expanded limits and tiered exemption based on holding period
Manufacturing Credits	Increased manufacturing investment credit to 35%
Charitable Giving	Deduction floors introduced for corporations and individuals
Business Losses	Permanent excess business loss limit with NOL carryover
Opportunity/New Markets	Permanent incentives, new rural opportunity funds, enhanced capital attraction
Employer Benefits	Permanent credits for FML leave, childcare, student loan assistance
Clean Energy	Removal or phase-out of prior green energy tax incentives
SALT Deduction	Cap increased to $40k temporarily
Reporting Thresholds	Higher thresholds for 1099-K and other income reporting

The One Big Beautiful Bill Act marks one of the most significant overhauls to business taxation in recent years. From permanent expensing provisions to expanded credits and new deduction thresholds, these changes present both opportunities and complexities for business owners. Understanding how the Act affects your industry, structure, and future planning is critical to making the most of its benefits. Our CPA-led advisory team is here to help you navigate the new tax landscape with clarity and confidence. Connect with us today to discuss how these provisions may impact your business.