Big Wins for Business Owners
The One Big Beautiful Bill Act (OBBBA) delivers significant benefits for businessowners making some favorable provisions permanent, enhancing others, and introducing new opportunities to save and invest. Whether you own a small business, partnership, or corporation, here’s what you need to know.
Qualified Business Income (QBI) Deduction — Here to Stay
One of the most valuable provisions from the 2017 tax reforms, the QBI deduction, is now permanent.
- Still allows eligible pass-through owners (like S Corps, partnerships, and sole proprietors) to deduct up to 20%of qualified business income.
- The income thresholds for phasing in the deduction are now higher: $75,000 (single) and $150,000 (joint), up from$50,000/$100,000.
- Even small businesses with at least $1,000 of QBI will see a minimum $400 deduction if they meet active trade or business requirements.
Full Expensing Made Easier
OBBBA expands opportunities to immediately deduct business investments which is a major win for cash flow and growth.
- Permanent 100% bonus expensing for certain business property.
- New elective 100% depreciation for qualified production property (temporary, but generous for projects started after Jan. 19, 2025 and placed in service by 2031).
- Expanded expensing for sound recordings produced in the U.S. up to $150,000/year.
- Section 179 expensing limit increased to $2.5M with a phaseout threshold starting at $4M.
R&D Deduction Changes
- Domestic research &development (R&D) costs can now be immediately expensed permanently.
- Businesses that incurred domestic R&D costs after Dec. 31, 2021 but before 2025 can elect to deduct those over 1–2 years instead of five.
- Foreign R&D costs must still be capitalized over 15 years.
Other Key Business Provisions
- Corporate Charitable Contributions: Businesses can now deduct contributions exceeding 1% of taxable income, up to a maximum of10%, with unused amounts potentially carried forward for five years.
- Opportunity Zones: The program is now permanent, but with rolling 10-year designations and some updated requirements.
- Business Interest Deductions: EBITDA calculation for interest limits is permanent; floor plan financing includes trailers & campers.
- Partnerships & REITs: Updated rules clarify disguised sales treatment and raise the allowable REIT subsidiary stockownership from 20% to 25%.
- Information Reporting: Increased the minimum for certain 1099 reporting to $2,000 and reverted the Form 1099-K threshold back to $20,000/200 transactions.
What’s Changing or Going Away?
- Employer-provided business meal deductions are permanently disallowed (with limited exceptions).
- Excess business loss limitations for non-corporate taxpayers are extended and adjusted for inflation.
Why This Matters
These changes offer business owners a unique chance to accelerate deductions, strengthen their bottom line, and make smarter investment, but they also come with new rules and deadlines.
Now is the time to review your tax strategy, assess your eligibility for these benefits, and ensure you’re positioned to take advantage of the expanded opportunities while staying compliant.
At Reagan & Reagan CPA, we help businesses navigate these complex changes, optimize deductions, and plan for growth. Contact us today to talk about what the One Big Beautiful Bill means for your business.
