The One Big Beautiful Bill Act

A New Era of Opportunity

The OBBBA is the most significant policy shift in years, creating a stable and pro-growth environment. It's designed to help you plan, invest, and grow with confidence.

1. Permanent 100% Bonus Depreciation

Supercharging Capital Investment

• Fact 1: The 100% immediate write-off for qualifying equipment, machinery, and vehicles is now permanent, reversing the previous phase-down.
• Fact 2: This applies to new and used property placed in service after January 19, 2025.
• Fact 3: A temporary 100% expensing is also available for new manufacturing and production structures placed in service before 2034.

2. Immediate R&D Expensing Restored

Fueling Domestic Innovation

• Fact 1: The requirement to spread R&D cost deductions over 5 years is repealed. You can now deduct 100% of domestic R&D costs in the year they occur.
• Fact 2: Crucial Relief: Small businesses (under $31M gross receipts) can retroactively apply this to 2022-2024 tax returns, potentially generating significant refunds.
• Fact 3: R&D done outside the U.S. must still be amortized over 15 years, creating a strong incentive to innovate domestically.

3. Section 199A QBI Deduction Secured

Permanent Relief for Pass-Through Entities

• Fact 1: The 20% deduction on qualified business income (QBI) for pass-throughs (S-corps, partnerships, sole props) is now permanent.
• Fact 2: Income thresholds for limitations are being expanded in 2026, making the full deduction available to more business owners.
• Fact 3: This solidifies the tax parity between pass-through businesses and large C-corporations.

4. Enhanced Section 179 Expensing

Expanded Write-Offs for Equipment

• Fact 1: The maximum amount you can immediately expense for equipment and software is doubled to $2.5 million per year.
• Fact 2: The investment limit before the deduction phases out is increased to $4 million.
• Fact 3: Both new limits are indexed for inflation to preserve their value over time.

5. Favorable Business Interest Deduction

Easing Limits on Financing Growth

• Fact 1: The formula for calculating how much business interest you can deduct is permanently changed to a more generous standard (EBITDA).
• Fact 2: This reverses a stricter rule (EBIT-based) that took effect in 2022, which penalized businesses for making capital investments.
• Fact 3: This change is especially helpful for capital-intensive businesses like manufacturing, agriculture, and real estate.

6. 1099-K Compliance Burden Lifted

A Return to Sensible Reporting

• Fact 1: The confusing $600 reporting threshold for Form 1099-K is repealed retroactively.
• Fact 2: The threshold is permanently restored to the original level: $20,000 AND over 200 transactions.
• Fact 3: The reporting threshold for payments to contractors (1099-NEC/MISC) is also increased from $600 to $2,000 (effective for 2026).

7. Expanded Employer Childcare Credit

A Powerful Tool to Support Working Families

• Fact 1: The tax credit for helping employees with childcare costs is boosted from 25% to 40%.
• Fact 2: For small businesses, the credit is even higher: a 50% credit for qualified expenses.
• Fact 3: The annual cap is raised significantly to $600,000 for small businesses, making this a financially viable benefit.

8. Greater Incentives for QSBS

Boosting Investment in Startups

• Fact 1: A new tiered holding period allows investors to get a tax break sooner: 50% gain exclusion at 3 years, 75% at 4 years, and 100% at 5 years.
• Fact 2: The lifetime cap on gains that can be excluded is increased by 50% to $15 million per investor.
• Fact 3: More startups can qualify, as the gross asset limit for an issuing C-corp is raised from $50M to $75 million.

9. Permanent Tax-Free Student Loan Repayment

A Key to Attracting and Retaining Talent

• Fact 1: The ability for employers to provide up to $5,250 per employee, per year in tax-free student loan repayment help is now permanent.
• Fact 2: The benefit is tax-free to the employee and tax-deductible for your business.
• Fact 3: The $5,250 annual limit will be indexed for inflation starting in 2027.

10. Certainty in Individual Tax Rates

Stabilizing the Tax Outlook for Business Owners

• Fact 1: The lower individual income tax rates from the 2017 TCJA are now permanent, avoiding a major tax hike in 2026.
• Fact 2: This is the most fundamental benefit for pass-through businesses, as your profits are taxed at these individual rates.
• Fact 3: The higher standard deduction is also permanent and increased, simplifying filing for many owners.

Your Strategic Action Plan