One Big Beautiful Bill Act: What Businesses Need to Know
Misha Brawner

Understanding the Impact of the New Tax Legislation

 

Navigating the complexities of new federal legislation can be daunting for business owners. The One Big Beautiful Bill Act introduces significant changes to the tax landscape, building upon the 2017 Tax Cuts and Jobs Act. This timely guide breaks down the overwhelming tax reforms into digestible insights, helping you understand what’s new and how it could affect your business.

 

Key Tax Reforms for Businesses

  • Bonus Depreciation Returns: Businesses can now permanently expense 100% of qualified capital assets acquired from January 20, 2025. This includes manufacturing buildings placed in service before 2031.
  • R&D Expensing Reinstated: Domestic research costs are now fully deductible, and there’s an accelerated recovery of 2022–2024 capitalized R&D. However, note that foreign R&D must still be amortized.
  • Business Interest Deduction Expansion: The return of the EBITDA-based limit offers larger deductions, with additional guidance on capitalization interactions.
  • Qualified Business Income (QBI) Deduction: The 20% QBI deduction is now permanent, with phase-ins expanded to $75,000 for singles and $150,000 for joint filers.

Additional Legislative Changes

  • Moving Expense Repeal: Moving expense exclusions have been permanently removed, except for active-duty military personnel.
  • Charitable Deduction Limits: A new 1% floor for corporate giving and a 0.5% AGI floor for individuals itemizing deductions have been introduced.
  • REIT Subsidiary Changes: The limit on taxable REIT subsidiary holdings will increase from 20% to 25% in 2026.
  • Qualified Small Business Stock (QSB) Updates: There are new tiered gain exclusion schedules, a higher $15M per-issuer cap, and a $75M gross assets threshold for QSB stock issued after July 4, 2025.

New Responsibilities and Opportunities

  • ERTC Enforcement Expansion: Be aware of the IRS’s increased authority and statute of limitations concerning erroneous ERTC claims.
  • Opportunity Zone Updates: The act has enhanced OZ definitions, introduced rural incentives, new reporting rules, and 10-year rolling designations starting in 2027.
  • Excise Tax on Remittances: There’s now a 1% tax on certain cash-based transfers abroad, while methods like bank and card transfers are exempt.

Proactive Planning and Professional Guidance

 

Although the One Big Beautiful Bill Act ushers in sweeping tax changes, proactive planning can mitigate potential surprises. Business owners are encouraged to review their tax strategies with a professional to ensure compliance and optimization under the new rules. By staying informed and prepared, you can navigate these changes smoothly and keep your business on a successful path.