On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), an ambitious legislative package that blends sweeping tax cuts with major spending adjustments. This nearly 900-page bill permanently embeds key provisions from the 2017 Tax Cuts and Jobs Act, while adding new incentives and enforcement measures that directly affect individuals and businesses, alike.
Below are three major components that business owners should be aware of:
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Bonus Depreciation and Section 179 Enhancements
The OBBBA makes 100% bonus depreciation for qualified business property permanent. Businesses can now immediately deduct the full cost of eligible property under contract after January 19, 2025. The law also provides a temporary 100% expensing allowance for qualified production property (certain nonresidential real property used in manufacturing). Additionally, Section 179 expensing limits are increased beyond prior thresholds, allowing businesses to expense more qualifying assets immediately.
Why it matters:
This change provides significant upfront tax relief for businesses making capital investments in qualified property. The enhancement to Section 179 also allows for strategic tax planning to maximize the value of deductions.
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R&D Expensing and Retroactive Acceleration of Capitalized Costs
Perhaps one of the most anticipated components of the bill is the repeal of mandatory capitalization and amortization of R&D expenses, reinstating the ability to fully expense research and development costs. Even more notable, the bill allows for retroactive acceleration of previously capitalized R&D expenses from 2022–2024, giving businesses the opportunity to deduct unamortized costs in the current year.
Why it matters:
This is a game-changer for innovation-driven businesses, including manufacturers. It restores a critical cash flow benefit that had been lost in recent years, while also offering the chance to reclaim deductions from prior periods.
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Qualified Business Income (QBI) Deduction Permanency
The 20% QBI deduction is now permanent, removing the sunset provision that would have eliminated it after 2025. The phase-in threshold for the wage and property limitation also increased, and a new $400 minimum deduction is established for qualified business income.
Why it matters:
The QBI deduction is a major tax benefit for businesses operating as pass-throughs and sole proprietorships, reducing their effective tax rate and increasing after-tax income. By raising the phase-in threshold and adding a minimum deduction, the OBBBA expands the benefit to more businesses and ensures that even smaller active businesses receive a meaningful deduction. The permanence also brings stability, helping to align long-term business strategies with expected tax outcomes.
Explore the Full Scope of the Legislation
The One Big Beautiful Bill Act spans a wide range of tax provisions beyond the highlights mentioned above, including changes affecting individuals, businesses, multinational entities, and more.
We’ve created a comprehensive chart summarizing the major provisions of the OBBBA and the potential impact on you or your business.
Still Waiting on IRS Guidance
Despite the headline-grabbing tax breaks, there is still a great deal of uncertainty around how various provisions will be interpreted and enforced. Please be aware that many implementation details remain unclear until further information is released by the IRS and other regulatory bodies.
Our team is actively monitoring developments and will provide updates as new guidance becomes available.
Next Steps
The OBBBA delivers significant, permanent tax relief and incentives for businesses and individuals, while also introducing new compliance requirements and limitations. The changes to reporting, deduction limitations, and credit eligibility will require careful planning and compliance updates.
Contact your Rea advisor directly to discuss how the One Big Beautiful Bill Act affects your business planning. We’re here to help navigate these changes together.