With a name like the “One Big Beautiful Bill,” it’s no surprise that this new tax legislation, signed on July 4, 2025, is packed with changes and questions. If you’re a business owner wondering What do I actually need to know? Or is there something I should be doing right now? You’re not alone.
From bonus depreciation made permanent to new rules around QBI deductions, research expenses, and energy credits, this bill could directly impact your bottom line. And while some updates offer new opportunities, others phase out incentives you may have been counting on.
This guide breaks down the biggest tax changes affecting businesses, so you can spend less time decoding legislation and more time making smart, timely decisions for your company.
Key Tax Changes in the OBBB
Qualified Business Income (QBI) deduction
The Act makes this deduction permanent. It also sets a minimum deduction for active QBI for “applicable taxpayers” at $400; defines an applicable taxpayer as one whose aggregate QBI for all active qualified trades or businesses for the tax year is at least $1,000; and establishes inflation adjustments for the new minimums starting in post-2026 tax years. Also, the phase-in amounts are increased from $50,000 to $75,000 for single filers and from $100,000 to $150,000 for joint filers.
Research & Experimentation expenditures
The new law provides that taxpayers are allowed to immediately deduct domestic research or experimental expenditures paid or incurred in tax years beginning after December 31, 2024. Foreign research or experimental expenditures must continue to be capitalized and amortized over 15 years under Code Sec. 174. In effect, taxpayers may deduct domestic research or experimental expenditures in the year paid or incurred, notwithstanding general capitalization rules. Small business taxpayers with average annual gross receipts of $31 million or less may retroactively elect to apply this change to tax years beginning after December 31, 2021. The election must be made by July 4, 2026 (within one year of the date of enactment) and requires amended returns for tax years impacted by the election. All taxpayers will be allowed to accelerate the remaining deductions for such expenditures over a one-year period or ratably over a two-year period.
Bonus depreciation
The Act makes additional first-year (bonus) depreciation for certain qualified property permanent at 100% (under prior law, it was to phase out to zero ). This provision is effective for property acquired after Jan. 19, 2025. There is also a new 100% bonus depreciation provision for “qualified production property” (QPP, which is certain non-residential real property used in the manufacturing, production, or refining of certain tangible personal property). This QPP provision is effective for property placed in service after July 4, 2025.
179 Expensing limits
For property placed in service after 2024, the Code Sec. 179 expensing limits are increased to $2,500,000, and the phasedown threshold is increased to $4,000,000 (both subject to inflation adjustments).
Business interest
For post-2025 tax years, the Act modifies the definition of adjusted taxable income for purposes of the Code Sec. 163(j) limitation on business interest.
Exclusion of gain on the sale or exchange of qualified small business stock (QSBS)
The Act provides that gain on the “applicable percentage” (50% for stock held for 3 years, 75% for stock held for 4 years, 100% for stock held for 5 years) is eliminated for QSBS acquired after July 4, 2025. Also, the gain exclusion threshold is increased from $10 million to $15 million, and the $50 million aggregate gross asset limit is increased to $75 million (subject to inflation adjustments).
Information reporting, Form 1099-K
The Act retroactively reverts the Form 1099-K reporting threshold back to the pre-ARPA $20,000 and 200 transactions threshold.
Information reporting, Forms 1099-NEC, 1099-MISC
For payments made after 2025, the reporting thresholds for Forms 1099-NEC and 1099-MISC are increased from $600 to $2,000 (adjusted for inflation after 2026).
Corporate charitable contributions
The Act imposes a new 1% floor (in addition to the 10% ceiling) on corporate charitable deductions for post-2025 tax years.
Excess business losses
The Act makes the Code Sec. 461(l) limit on excess business losses permanent.
Energy efficient commercial buildings deduction
Under the Act, the energy efficient commercial building deduction terminates for the cost of energy efficient commercial building property whose construction begins after June 30, 2026.
Cost recovery for energy property
The Act eliminates the 5-year MACRS classification for energy property, effective for property for which construction begins after 2024.
Advanced energy project credit
Effective July 4, 2025, “add backs” in the event of the revocation of a project certification are discontinued.
Advanced manufacturing production credit
The Act terminates the credit for wind energy components produced and sold after Dec. 31, 2027. It also subjects pre-Act applicable critical minerals to a new phase-out schedule and tightens the rules regarding foreign entities.
Energy efficient home improvement and new energy-efficient home credits
The energy efficient home improvement credit under Code Sec. 25C is terminated for property placed in service after 2025. The new energy efficient home credit under Code Sec. 45L terminates for any qualified new energy efficient home acquired after June 30, 2026.
Residential clean energy credit
The residential clean energy expenditures credit is terminated for any expenditures made after 2025.
Clean vehicle credits
The credits for new and previously owned clean vehicles terminate for vehicles acquired after Sept. 30, 2025. The credit for qualified commercial clean vehicles also terminates for vehicles acquired after Sept. 30, 2025.
Alternative fuel vehicle refueling property credits
The credit for “alternative fuel vehicle refueling property” (such as an EV charger) terminates for property placed in service after June 30, 2026.
How to Prepare for What’s Ahead
The reality is, some of these changes are immediate. Others give you a window of time, but not an unlimited one. Knowing what applies to your business (and what doesn’t) is the first step toward making confident, tax-smart moves.
We’re here to help you navigate what matters most, whether that’s taking advantage of the extended QBI deduction, rethinking your capital investments, or understanding what clean energy incentives are ending.
If you’ve got questions or want to talk through what this means for your situation, let’s connect. A quick conversation could save you time, taxes, or both.
