A Clearer Look at the One Big Beautiful Bill Act

Understanding new federal legislation can feel overwhelming, especially when the changes impact nearly every corner of your business. The One Big Beautiful Bill Act brings some of the most significant tax reforms since the 2017 Tax Cuts and Jobs Act, and we’re here to help you make sense of what’s new, what’s permanent, and what may affect your planning in the months ahead.

Key Tax Benefits Returning or Expanding

Bonus Depreciation Permanently Restored

Businesses can now permanently expense 100% of qualified capital assets acquired on or after January 20, 2025. This includes manufacturing buildings placed in service before 2031, giving capital‑intensive industries a meaningful planning edge.

R&D Expensing Reinstated

Domestic research costs are once again fully deductible, and companies can accelerate recovery of R&D expenses that were capitalized from 2022–2024. Foreign research, however, must still be amortized, so cross‑border operations should plan accordingly.

Qualified Business Income Deduction Made Permanent

The 20% QBI deduction is now a permanent fixture. The phase‑in thresholds rise to $75,000 for single filers and $150,000 for joint filers, bringing additional relief to a wider range of business owners.

Important Adjustments Affecting Deductions

Business Interest Deduction Expansion

The Act brings back the EBITDA‑based limitation, allowing larger deductions. It also adds clarity on how capitalization rules interact with interest expense—an important detail for highly leveraged businesses.

Charitable Contribution Floors Introduced

Corporate donors now face a 1% floor on charitable deductions, while individuals who itemize must meet a 0.5% AGI floor. This change may influence year‑end giving strategies.

Meal Deduction Reductions Ahead

Starting in 2026, employer‑provided on‑site meals will see reduced deductibility, though certain fishing businesses receive an exemption.

Moving Expense Exclusion Repeal

The repeal is now permanent, except for active‑duty military members. Employers offering relocation benefits may want to revisit their reimbursement structures.

Sector‑Specific and Structural Updates

REIT Subsidiary Limit Increase

Beginning in 2026, taxable REIT subsidiary holdings may rise from 20% to 25%, offering more flexibility in REIT structuring.

Qualified Small Business Stock (QSB) Enhancements

For QSB stock issued after July 4, 2025, the Act introduces a new tiered exclusion schedule, increases the per‑issuer cap to $15 million, and lifts the gross asset threshold to $75 million—expanding opportunities for both founders and investors.

Opportunity Zone Modernization

Definitions are expanded, rural incentives strengthened, and reporting requirements heightened. A new 10‑year rolling designation begins in 2027, offering ongoing investment potential with clearer oversight.

Disaster Loss Relief Made Permanent

TCJA casualty loss rules are now permanent, and state‑declared disasters qualify for relief—helping affected businesses recover more quickly.

Compliance and Enforcement Considerations

ERTC Enforcement Expansion

The IRS receives greater authority and an extended statute of limitations to challenge erroneous Employee Retention Tax Credit claims. Businesses that previously claimed the credit should ensure their documentation is airtight.

New Excise Tax on Certain Remittances

A 1% excise tax now applies to specific cash‑based transfers abroad. Transfers made via banks or credit cards are exempt, making method selection more important.

Energy Credit Reductions

Several energy‑related incentives—including the Clean Electricity Production and Investment Credits—are reduced or scheduled for phase‑out, potentially affecting long‑term project planning.

While the One Big Beautiful Bill Act introduces wide‑ranging changes, thoughtful planning can help reduce surprises and position your business for success. As always, reviewing your tax strategy with a qualified professional is the best way to stay compliant and optimize under the new rules.