What the One Big Beautiful Bill Act Means for Your Business: Key Tax Changes to Know

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, delivering sweeping updates to the U.S. tax code. While the legislation includes wide-ranging reforms, many of the most impactful changes directly affect businesses—both domestic and international.

Whether you’re a small business owner or leading a multinational operation, now is the time to revisit your tax strategy. Below, we break down the key provisions of the OBBBA that could influence your mid-year and long-term planning.

✅ QBI Deduction Made Permanent
Good news for owners of pass-through entities and sole proprietorships—the 20% deduction for Qualified Business Income (QBI) is here to stay. Originally set to expire in 2025, this deduction is now permanent, with higher income thresholds and a new inflation-adjusted minimum deduction of $400 for those earning at least $1,000 in active business income.

💻 Bonus Depreciation and Expensing Boosts
Planning a major equipment purchase? The OBBBA reinstates 100% first-year bonus depreciation for new and used assets placed in service after January 19, 2025—reversing the TCJA’s phasedown schedule. Qualified assets include:

• • Computer systems and software
  • Office furniture
  • Certain vehicles
  • Qualified improvement property

Additionally, Section 179 expensing limits rise to $2.5 million, with a phaseout threshold of $4 million—both indexed for inflation in future years.

🧪 Immediate Deduction for Domestic R&E
The OBBBA allows businesses to fully deduct domestic Research & Experimentation (R&E) expenses starting in 2025. Previously, these costs had to be amortized over five years (or 15 years for foreign R&E).

Small businesses with less than $31 million in average gross receipts may retroactively deduct R&E expenses from 2022–2024—and all businesses can accelerate remaining deductions over one or two years.

💸 Expanded Business Interest Deduction
Beginning in 2025, depreciation, amortization, and depletion are excluded from the calculation of Adjusted Taxable Income (ATI)—effectively increasing the cap on allowable business interest deductions.

🚫 ERTC Crackdown
The OBBBA prohibits the IRS from issuing refunds for Employee Retention Tax Credit (ERTC) claims filed after January 31, 2024 and gives the IRS six years to review and audit existing claims.

🌱 Changes to Clean Energy Incentives
Several Inflation Reduction Act green energy credits are being phased out, including:

• • The commercial clean vehicle credit
  • Alternative fuel refueling property credit
  • Section 179D deduction for energy-efficient commercial buildings
  • Most of these phaseouts begin after 2026.

🏙️ Opportunity Zones Reimagined
The Qualified Opportunity Zone (QOZ) program is now permanent and comes with enhanced benefits:

• Incremental gain reductions based on holding period
• Required realization of gains in year 7 (with stepped-up basis)
• A new class of QOZs targeting rural areas with a triple step-up in basis

• New funds become available January 1, 2027

🌍 International Tax Revisions
The OBBBA makes permanent several international tax provisions from the TCJA, including:

• FDII and GILTI deductions, with a unified 14% rate
• The Base Erosion and Anti-Abuse Tax (BEAT) now permanently set at 10.5%
• The proposed “revenge tax” targeting foreign discriminatory tax regimes was not included in the final law

💼 Additional Provisions You Should Know

• Excess Business Loss Limitation is now permanent
• New Markets Tax Credit extended
• Employer student loan repayment exclusion extended with inflation adjustments
• Child care credit raised to 40% (or 50% for small businesses), up to $600,000
• Paid Family & Medical Leave credit now permanent and extended to certain insurance premiums

📌 What This Means for You
The OBBBA brings long-term clarity to many business tax strategies—but its complexity also raises the stakes for making the right planning decisions.At Bland & Associates, we’re here to help you:

• Identify new opportunities for deductions
• Maximize savings from updated provisions
• Align your strategy with the new tax landscape

📩 Let’s Talk: Reach out today to schedule a consultation with our business tax experts.