Navigating the One Big Beautiful Bill Act for Businesses

Understanding the Big Changes Ahead

New federal legislation often brings a fair share of complexity and uncertainty, and the "One Big Beautiful Bill Act" is no exception. This sweeping reform reshapes the business tax landscape, echoing the transformative changes introduced by the 2017 Tax Cuts and Jobs Act. For business owners, understanding these changes is crucial, as they offer both challenges and opportunities. Here’s what you need to know about the latest provisions.

Capital Investments and Business Deductions

One major shift is the return of Bonus Depreciation. Businesses can now permanently expense 100% of qualified capital assets acquired from January 20, 2025. This includes manufacturing buildings placed in service before 2031, providing a significant incentive for capital investment. Additionally, the Business Interest Deduction Expansion brings back the EBITDA-based limit, allowing for larger deductions and detailed guidance on capitalization interactions.

R&D and Qualified Income Tax Benefits

Research is vital to innovation, and with R&D Expensing Reinstated, domestic research costs are fully deductible again. Businesses can also accelerate the recovery of 2022–2024 capitalized R&D costs, though foreign R&D must still be amortized. For small business owners, the Qualified Business Income (QBI) Deduction is a win, with the 20% deduction now permanent and phase-in levels expanded to $75,000 for singles and $150,000 for joint filers.

Philanthropy and Employee-Related Changes

The new legislation also affects charitable activities, introducing a 1% floor for corporate giving and a 0.5% AGI floor for individuals itemizing deductions. Employers should note that Meal Deduction Changes are imminent. Starting in 2026, deductions for on-site meals will be limited, except for certain fishing businesses. Meanwhile, the Moving Expense Repeal is now permanent, with exceptions only for active-duty military personnel.

Investment and Stock Regulations

Real Estate Investment Trusts face new rules under the REIT Subsidiary Changes, with the limit on taxable subsidiary holdings increased from 20% to 25% in 2026. Additionally, there are Qualified Small Business Stock (QSB) Updates, including a tiered gain exclusion schedule, a higher $15 million per-issuer cap, and a $75 million gross assets threshold for stocks issued after July 4, 2025.

Compliance, Enforcement, and Tax Adjustments

Businesses must be cautious of the ERTC Enforcement Expansion, which grants the IRS increased authority and a broadened statute of limitations for erroneous claims. Concurrently, Disaster Loss Relief provisions ensure that TCJA casualty loss deduction rules are now permanent, allowing state-declared disaster losses to qualify. On the global front, an Excise Tax on Remittances introduces a 1% tax on specific cash transfers abroad, with certain bank and card methods exempt.

Adapting and Overcoming

While the One Big Beautiful Bill Act presents substantial tax modifications, businesses can get ahead by engaging in proactive planning. Reviewing your tax strategy with a professional will be key in ensuring compliance and optimizing the benefits under these new regulations. Staying informed and adaptable will help navigate through these changes seamlessly.