The "One Big Beautiful Bill" (OBBB) passed earlier this summer implemented a host of tax changes (while keeping around several cornerstones of the current tax code) that will in one way or another impact most individual American taxpayers.

But the budget reconciliation bill's reach wasn't limited to individuals—far from it.

No, the OBBB also included a number of provisions that are either changing the way self-employed people, companies, and business owners do their taxes … or in a few cases, locking in parts of the tax code that were set to expire.

Today, we'll look at some of the most important business-tax effects of the OBBB.

The One Big Beautiful Bill (OBBB)

President Donald Trump's first term saw the passage of the Tax Cuts and Jobs Act (TCJA)—a budget reconciliation bill that, starting in 2018, made sweeping changes to the federal tax code for both individuals and businesses alike.

However, many of those provisions were temporary, made to either phase out over time or blip out of existence entirely. And many of those drop-offs were expected to happen in 2026, prompting Congress to work on extending or otherwise addressing them in 2025.

They did—and introduced a number of other, unrelated changes—with the OBBB.

How Will Business Taxes Change Under the OBBB?

Today, we're going to take a look at some of the most impactful business-tax provisions from the OBBB, which include several measures meant to deal with expiring or changing TCJA provisions, as well as a number of new tax breaks, too.

And we'll do so with the help of a guest: Jordan I. Taylor of Capital Review Group, a national incentive review/tax advisory firm.

1. Permanently Reinstates 100% Bonus Depreciation

Businesses are allowed to depreciate a wide variety of assets—from computers and office equipment to vehicles to certain commercial real estate to even some farm animals—over various periods of time (from three to 39 years, depending on the type of property) after their purchase to help spread out the financial impact.

"Bonus depreciation," first created in 2002 through the Job Creation and Worker Assistance Act, helps speed that process up by allowing businesses to deduct a much larger percentage of that purchase in the year it was made. The amount has changed over time—under the Tax Cuts and Jobs Act, businesses were awarded 100% bonus depreciation for a few years, but it was phasing down (80% in 2023, 60% in 2024, etc.) and set to expire by 2027.

Young and the Invested Tip: Curious about what the OBBB means for your personal taxes? Check out these five new deductions that the bill created.

However, the OBBB permanently restored 100% bonus depreciation, applicable to any qualifying assets that were acquired (and placed into service) after Jan. 19, 2025.

"The reinstated bonus depreciation can be a particularly powerful tool for unlocking tax savings," Taylor says.

What does this look like for business owners?

"Let's say I pay taxes at a 30% [effective] tax rate. If I spend $100,000 and I write that off, I'm going to save $30,000 in taxes by writing the entire thing off, so my net cost of that $100,000 purchase is $70,000," Taylor says. "Now, what if I wrote it off over five years? If I spend that hundred thousand and I only write off 20%, I'm only going to save about $6,000 [upfront].

"My net cost is $94,000 in year one versus $70,000 [under 100% bonus depreciation], so you can see how the math is compelling when you get to save so much in the first year of purchase."

That example only refers to federal income tax—when accounting for state income tax, the savings can be even higher.

2. Increases Deductibility of Business Interest

Prior to the TCJA, IRS rules around deducting interest expenses were largely loose and favorable to businesses. But starting in 2018, the bill limited the deductibility of net business interest expenses to 30% of earnings before interest, taxes, depreciation, and amortization (EBITDA) on most businesses. (The limitation didn't apply to companies with less than $25 million in average receipts over the prior three years.)

However, the bill also had a provision that tightened the limitation further: Starting in 2022, the deduction would be based not on EBITDA, but simply earnings before interest and taxes (EBIT).

The OBBBA not only reverted the earnings base to EBITDA starting in 2025, but made the reversion permanent. 

In short: This should generally allow businesses to enjoy larger interest deductions.

3. Makes the QBI Deduction Permanent

The qualified business income (QBI) deduction, which allows many self-employed individuals and small-business owners to deduct up to 20% of business income from a qualified trade or business, is another creation of the Tax Cuts and Jobs Act.

Like several TCJA provisions, however, it was set to expire after 2025.

The OBBB's most notable effect on the QBI deduction was making it permanent, but it also added a few modest changes. 

Young and the Invested Tip: One of the most noteworthy OBBB impacts on individual taxpayers was a change in the State and Local Taxes (SALT) deduction. Here's what you need to know.

For instance, the deduction begins to phase out when a taxpayer earns a certain amount above a specific income threshold. In 2025, the threshold is $394,600 for married couples filing jointly and $197,300 for all other filers. Previously, the phase-out range would've been $100,000 and $50,000, respectively (so up to $494,600 and $247,300). However, the OBBBA increases these ranges to $150,000 and $75,000, respectively (so up to $544,600 and $272,300), and indexes them for inflation after 2026.

The takeaway here is that more taxpayers should be able to claim the QBI deduction.

Note: This deduction also applies to qualified real estate investment trust (REIT) dividends and publicly traded partnership (PTP) income.

4. Enhances Qualified Small Business Stock (QSBS) Rules

One OBBB provision—changes to Qualified Small Business Stock (QSBS) rules—should benefit small business owners and shareholders.

The Internal Revenue Code's Section 1202 allows investors to exclude up to 100% of capital gains tax on QSBS, which refers to the common or preferred shares of a domestic C corp. This tax exclusion is subject to several eligibility criteria, some of which has changed with the passage of the OBBB:

• The asset threshold for a company to be considered a small business under QSBS rules has been raised from $50 million to $75 million, increasing the number of companies (and thus owners and employees) that can enjoy this exclusion.
• The exclusion cap was previously set at the greater of $10 million or 10 times the cost basis of the stock sold. The OBBB raised that to the greater of $15 million or 10 times the cost basis.
• QSBS rules previously required a taxpayer to own the stock for at least five years to enjoy the full tax exclusion. The new rules, thanks to the OBBB, set up a tiered system that allows partial exclusions for shorter holding periods. Investors can now receive a 50% exclusion on stock held for at least three years, and a 75% exclusion on stock held for at least four years. The 100% exclusion remains the same for stock held for five or more years.

5. Makes Immediate Domestic R&D Expensing the Default (For Now)

The TCJA required certain domestic research and development (R&D) expenditures paid or incurred starting in 2022 to be capitalized and amortized over a five-year period. 

But with the passage of the OBBB, companies are now allowed to fully expense domestic R&D costs immediately, starting with R&D costs incurred in the 2025 tax year. Also …

• Certain eligible small businesses (with less than $31 million in receipts) that capitalized domestic R&D costs during the 2022 to 2024 tax years may retroactively expense those costs by amending their prior returns
• Larger businesses can accelerate deductions for previously capitalized costs across the 2025 and 2026 tax years.

Foreign research expensing remains the same, however; it must still be capitalized and amortized over a 15-year period. Also, this provision is set to expire after the 2029 tax year.

Determining whether certain actions fall under R&D is often straightforward, but sometimes involves a bit of nuance. For instance, companies simply selling a product they don't actually create, or providing a service, typically don't apply. Instead, the R&D expensing is meant to incentivize creating and innovating new things, services or processes (and taking the risk associated with that creation).

"Business in sectors such as technology, life sciences, and advanced manufacturing stand to benefit most directly," Taylor says. "But one example of areas in which we see a lot of nuance is in architecture."

"Let's say I'm an architect and working on the development of a plan. If I'm doing that creation on a fixed-fee basis, meaning I as the architecture studio, I'm taking on the financial burden of however much time this takes us to do it, that fixed fee is how much we're getting paid—that type of work might qualify for R&D. Where it doesn't qualify is if I'm the architect and I say, 'Hey, I'm just billing you for my time and you as the client are bearing the risk of that process.'"

That said, the qualification process for R&D starts with the IRS's four-part test, where you have to meet not just one criterion, but all four. So as a business, you won't be guessing—you'll know.

6. Sunsets Section 179D for Projects Starting After June 30, 2026

Most of the OBBB's provisions are meant to provide financial upside for business taxpayers, but one of them takes away an existing (and longtime) benefit: the Section 179D deduction.

"Section 179D of the federal tax code provides a deduction of up to $5.81 per square foot (indexed for inflation) for qualifying energy-efficient improvements to a building's lighting, HVAC systems, or the building envelope," Taylor says. "Additionally, architects, engineers, contractors, and other 'primary designers' who perform qualifying work on buildings owned by government, nonprofit, tribal, or religious organizations are also eligible for the deduction."

The deduction has been around since the Energy Policy Act of 2005 was passed, but without further legislation, it will no longer be available to building owners and designers implementing these energy efficiency systems.

"I do think there is a real chance it'll come back at some point," Taylor says. "If you go back to when 179D was implemented, it largely was and has been a bipartisan issue where it both incentivizes larger-scale commercial development and incentivizes energy efficiency."