Are you wondering what the latest tax bill means for your business? The One Big Beautiful Bill Act (OBBBA), passed in July 2025, represents the biggest shift in tax law since the 2017 Tax Cuts and Jobs Act. This new law delivers permanent tax cuts for business owners while introducing a few new rules that may require strategic tax planning.
In this article, we’ll break down the key provisions of the One Big Beautiful Bill Act that directly impact businesses and help you understand how these tax changes might affect your business planning and operations.
What Is the One Big Beautiful Bill Act?
The One Big Beautiful Bill Act builds upon the foundation of the 2017 Tax Cuts and Jobs Act, making many of its business-friendly provisions permanent while adding new elements. The bill aims to provide long-term tax certainty, improve cash flow for small and large businesses, and simplify planning for the future.
Key highlights of the changes for business owners include:
- Permanent relief for pass-through entities with an expanded Qualified Business Income (QBI) deduction.
- Enhanced depreciation rules that make 100% first-year bonus depreciation permanent.
- R&D expense deductions restored to a single-year write-off.
- Adjustments to clean energy credits and international tax rules.
- Expanded employee-related tax benefits, including student loan repayment and child care credits.
The law takes a comprehensive approach to business taxation, addressing issues that have been temporary fixes for years. Let’s take a closer look at each of these changes so you can plan for your business accordingly.
Permanent Tax Relief for Pass-Through Businesses
One of the most significant aspects of the One Big Beautiful Bill Act is making the Section 199A qualified business income (QBI) deduction permanent. This provision was set to expire after 2025, creating uncertainty for millions of business owners who operate as partnerships, LLCs, S corporations, or sole proprietorships.
The QBI deduction allows eligible business owners to deduct up to 20% of their qualified business income, effectively reducing their tax rate on business profits.
What’s new?
- Expanded thresholds: The phase-in range for service businesses is now $75,000 for single filers (up from $50,000) and $150,000 for joint filers (up from $100,000).
- Minimum deduction: A new minimum QBI deduction of $400 applies for taxpayers with at least $1,000 of qualified business income from active businesses where they materially participate.
For many business owners, this is one of the most valuable One Big Beautiful Bill Tax cuts, as it provides immediate tax savings for small and mid-sized businesses.
Bonus Depreciation For Qualifying Assets
Under prior law, bonus depreciation was set to phase out starting in 2025. The One Big Beautiful Bill Act changes that by making 100% first-year bonus depreciation permanent for qualifying new and used assets.
Bonus depreciation is a tax incentive that allows businesses to deduct a large percentage — or even the full cost — of certain qualifying assets in the year they’re placed into service, rather than spreading the deduction over several years through regular depreciation.
This change reverses the scheduled phase-out of bonus depreciation that would have reduced the deduction to 40% in 2025, 20% in 2026, and eliminated it entirely in 2027. Now, businesses can immediately deduct the full cost of qualifying equipment, machinery, and other assets in the year they’re purchased.
The legislation also introduces a temporary 100% deduction for “qualified production property,” which generally includes nonresidential real property used in manufacturing. This provision applies to property placed into service after July 4, 2025, and before 2031, providing a significant incentive for manufacturing investments.
Section 179 expensing limits have also been increased, allowing businesses to immediately expense up to $2.5 million in qualifying assets, with a phase-out threshold of $4 million for 2025. Both amounts will be adjusted annually for inflation going forward.
Research and Development Expense Changes
Since 2022, businesses were forced to amortize R&D expenses over 5–15 years — but that’s now reversed. The One Big Beautiful Bill Act now allows domestic R&D expenses to be deducted in the year they occur, starting in 2025.
Small businesses with average annual gross receipts of $31 million or less can even claim this deduction retroactively to 2022. Any business that incurred domestic R&D expenses from 2022 through 2024 can elect to accelerate the remaining deductions for those expenditures over a one- or two-year period.
Changes to Clean Energy Incentives
The One Big Beautiful Bill significantly modifies the clean energy tax landscape for businesses. The law eliminates several clean energy tax incentives that were part of the Inflation Reduction Act, including the qualified commercial clean vehicle credit and the alternative fuel vehicle refueling property credit.
The Section 179D deduction for energy-efficient commercial buildings has also been eliminated under the new law. For businesses that were planning to take advantage of these incentives, it’s important to understand the new timelines and restrictions.
The law accelerates some phaseouts rather than eliminating incentives entirely, and it moves up project deadlines for others. The specific expiration dates vary by incentive, so businesses should review their clean energy plans carefully.
For example, the commercial clean vehicle credit can’t be claimed for vehicles acquired after September 30, 2025, instead of the previous deadline of December 31, 2032. The alternative fuel vehicle refueling property credit expires after June 30, 2026.
International Tax Provisions
For businesses operating globally, the One Big Beautiful Bill tax changes include:
- Permanent deductions for foreign-derive intangible income (FDII) and global intangible low-taxed income (GILTI).
- A 14% effective tax rate for both FDII and GILTI starting in 2026.
- A permanent 10.5% base erosion and anti-abuse tax (BEAT), which impacts U.S. corporations with $500M+ in gross receipts.
These international tax changes under the One Big Beautiful Bill Act give multinational businesses more predictability, but they also require careful planning to ensure compliance and minimize the impact of the new 14% rates and BEAT provisions.
Employee-Related Tax Benefits
The One Big Beautiful Bill Act includes several provisions that can help businesses manage employee-related costs more effectively, with key updates that include:
- Permanent Student Loan Repayment Exclusion: Employers can now permanently exclude up to $5,250 annually in student loan repayments from an employee’s taxable income. This amount will be adjusted for inflation starting in 2026, making it a valuable tool for companies looking to support employees burdened by student debt.
- Expanded Child Care Credit: The maximum employer-provided child care credit has increased from 25% to 40% of qualified expenses, up to $500,000 per year. Small businesses see even greater benefits, with a 50% credit up to $600,000 annually. These amounts will also be adjusted annually for inflation after 2026, providing long-term planning advantages.
- Paid Family and Medical Leave Credit: The tax credit for paid family and medical leave is now permanent and includes expanded eligibility for credits on insurance premium reimbursements.
By taking advantage of these credits and exclusions, employers can enhance their benefits programs without adding significant costs.
One Big Beautiful Bill Act Tax Changes for Business Owners Overview
Major Big Beautiful Bill Tax Changes: Before vs. After OBBBA
| Provision | Before OBBBA | After OBBBA (2025) |
| QBI Deduction (Section 199A) | 20% deduction set to expire after 2025 | Permanent 20% deduction with expanded thresholds ($75k single / $150k joint) and $400 minimum deduction for small businesses |
| Bonus Depreciation | Scheduled phase-out (100% → 40% in 2025 → 20% in 2026) | Permanent 100% first-year bonus depreciation for qualifying new and used assets |
| Section 179 Expensing | Deduction limit of $1.16M, phase-out at $2.89M (2024) | Deduction limit increased to $2.5M, phase-out at $4M, indexed for inflation after 2025 |
| Manufacturing Property Deduction | No specific full deduction for production property | 100% deduction for “qualified production property” placed in service from July 4, 2025 to Dec 31, 2031 |
| R&D Expense Deduction | Must amortize domestic R&D over 5 years (15 for foreign) | Immediate deduction of domestic R&D expenses; retroactive relief for small businesses back to 2022 |
| Clean Energy Credits | Multiple credits (e.g., clean vehicle, refueling property) available until 2032 | Several credits eliminated or phaseouts accelerated (e.g., clean vehicle credit ends after Sept 30, 2025) |
| FDII & GILTI | Temporary deductions with higher effective tax rates | Permanent deductions with a 14% effective tax rate starting 2026 |
| BEAT (Base Erosion Tax) | Temporary rules with lower rate | Permanent BEAT at 10.5% for large corporations ($500M+ receipts) |
| Student Loan Repayment Exclusion | Temporary exclusion expiring in 2025 | Permanent $5,250 annual exclusion (indexed for inflation after 2026) |
| Child Care Credit | 25% of qualified expenses (up to $500k/year) | 40% (up to $500k) for large businesses, 50% (up to $600k) for small businesses |
| Paid Family Leave Credit | Set to expire in 2025 | Permanent credit, now includes insurance premium reimbursements |
Planning Considerations for Business Owners
The 2025 tax increase that many businesses feared has been largely avoided through the passage of the One Big Beautiful Bill Act. However, the law also introduces new complexity that requires careful planning and consideration.
Business owners should review their current tax strategies in light of these changes and consider how the permanent nature of many provisions affects long-term planning. The enhanced depreciation benefits, in particular, may influence decisions about equipment purchases and capital investments.
It’s also important to stay informed about implementation details as the IRS issues guidance on the new provisions. While the law extends many existing provisions, some of the new elements will require additional clarification from tax authorities.
Taking full advantage of these benefits requires understanding the details and planning accordingly. Click here to schedule a call with our financial advisors in Tampa to get personal guidance on how to integrate these latest changes into your business and personal financial plan.
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Disclosure: Jaffe Tilchin Investment Partners is a Registered Investment Advisor. Certain representatives of Jaffe Tilchin Investment Partners are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC. 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211 Check the background of this firm on FINRA’s BrokerCheck
