Understanding the One Big Beautiful Bill Act for Businesses

Understanding New Legislation Complexity

Navigating through new federal legislation can be daunting, especially when it brings significant changes to the tax landscape. The One Big Beautiful Bill Act has introduced comprehensive reforms to the tax code, building on the foundations laid by the 2017 Tax Cuts and Jobs Act. This post serves as a timely guide to help business owners make sense of these changes and understand their implications.

Enhanced Deductions and Depreciation Changes

The Bonus Depreciation Returns now allow businesses to permanently expense 100% of qualified capital assets acquired from January 20, 2025. This includes manufacturing buildings placed in service before 2031, promoting investment in infrastructure.

Meanwhile, the Business Interest Deduction Expansion reinstates the EBITDA-based limit, offering larger deductions and providing guidance on capitalization interactions, ultimately benefiting businesses with substantial capital investments.

R&D and Income Deductions

The act also reinstates R&D Expensing, making domestic research costs fully deductible, and allows for accelerated recovery of 2022–2024 capitalized R&D. However, it's crucial to note that foreign R&D must still be amortized.

In addition, the Qualified Business Income (QBI) Deduction is now permanent, with phase-ins expanded to $75,000 for single filers and $150,000 for joint filers. This change aims to alleviate tax burdens on small businesses and promote growth.

Charitable Contributions and Meal Deductions

Corporate giving now benefits from a new 1% floor for charitable deductions, while individuals itemizing deductions can enjoy a 0.5% AGI floor. However, Meal Deduction Changes will cap on-site employer-provided meal deductions in 2026, except for selected industries like fishing businesses.

Stock and Compliance Adjustments

Changes to Qualified Small Business Stock (QSB) include a tiered gain exclusion schedule, a higher $15M per-issuer cap, and an increased $75M gross assets threshold for stock issued after July 4, 2025.

The IRS now has increased authority with expanded enforcement on ERTC claims, cautioning businesses to ensure accurate documentation and compliance.

Final Thoughts on Strategic Planning

With these sweeping changes, proactive planning and a thorough review of your tax strategy are crucial. Collaborate with tax professionals to ensure compliance and optimize benefits under the new rules. Armed with the right guidance, navigate these reforms with confidence to secure your business's financial health.