New federal legislation can feel overwhelming, especially when the changes have real financial implications for your business. The One Big Beautiful Bill Act builds on the 2017 Tax Cuts and Jobs Act and introduces a wide range of reforms. This overview breaks down key updates to help you better understand what’s new and how it may affect your planning.
Key Deduction and Expensing Updates
The Act permanently restores full expensing for qualified capital assets acquired on or after January 20, 2025, including certain manufacturing buildings placed in service before 2031. Domestic research costs are also fully deductible once again, and businesses can now accelerate the recovery of R&D expenses capitalized between 2022 and 2024. However, foreign research must still be amortized.
The Qualified Business Income (QBI) deduction is now permanent as well, with expanded phase-in thresholds of $75,000 for single filers and $150,000 for joint filers. Additionally, meal deductions will change in 2026, with limits placed on employer-provided on‑site meals except for specific fishing-related operations.
Corporate and Investment-Related Changes
The corporate charitable deduction now has a 1% floor, while individuals who itemize will see a new 0.5% AGI floor. For real estate investment trusts, the allowable share of taxable REIT subsidiary holdings will increase from 20% to 25% starting in 2026.
Qualified Small Business Stock (QSB) rules are also receiving updates, including a tiered gain exclusion schedule, a new $15 million per‑issuer cap, and an increased $75 million gross assets threshold for QSB stock issued after July 4, 2025.
Compliance, Enforcement, and Credits
The IRS will have expanded enforcement authority for erroneous ERTC claims, including a longer statute of limitations. Businesses should also be aware that energy‑related credits—such as the Clean Electricity Production and Investment Credits—are set to be reduced or phased out entirely.
Casualty loss rules under the TCJA are now permanent, and state‑declared disaster losses will qualify going forward. Updates to Opportunity Zones include refined definitions, incentives for rural regions, strengthened reporting rules, and rolling 10‑year designations beginning in 2027.
Other Notable Provisions
A new 1% excise tax will apply to certain cash-based remittances sent abroad, although bank and card transfers are exempt. The Act also permanently repeals moving expense exclusions for most taxpayers, except active-duty military personnel.
Finally, the business interest deduction limit returns to an EBITDA-based calculation, providing broader deduction opportunities along with new guidance on capitalization interactions.
While the One Big Beautiful Bill Act brings sweeping and sometimes complex changes, proactive planning can help reduce uncertainty. Consider reviewing your tax strategy with a professional to ensure you’re well‑prepared and positioned to take advantage of available opportunities under the new law.
