In July 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law, ushering in major tax changes designed to support small businesses. The bipartisan legislation not only preserves key provisions from the 2017 Tax Cuts and Jobs Act (TCJA), but also introduces new incentives to encourage investment, innovation, and hiring.
Key Highlights
Permanent QBI Deduction
The 20% pass-through deduction is now permanent, with expanded income thresholds and a new minimum deduction—helping small businesses avoid potential tax hikes.
100% Bonus Depreciation Restored
Businesses can fully deduct the cost of qualifying property placed in service after January 19, 2025, boosting cash flow and investment.
Immediate R&D Expensing
Domestic research and experimental costs are now fully deductible, reversing the previous five-year amortization rule and supporting innovation.
Expanded Section 179 Expensing
The maximum immediate deduction rises to $2.5 million, with a phase-out starting at $4 million—ideal for equipment and technology upgrades.
New & Enhanced Tax Credits
- Employer-Provided Childcare Credit increased to $600,000 annually.
- Paid Family and Medical Leave Credit made permanent.
- Temporary deductions for tips, overtime, and vehicle loan interest (up to $10,000) available through 2028.
Reporting Relief:
- 1099-K Threshold Raised: Now applies only to sellers with over $20,000 in payments and 200+ transactions.
Take Action:
Business owners should consult their tax advisors before year-end to take full advantage of these changes. With generous depreciation rules now in place, 2025 is an especially attractive year for capital investments.
