Navigating the One Big Beautiful Bill Act for Business

Sugam Sharma

With the introduction of the One Big Beautiful Bill Act, businesses across the nation face a wave of new regulations and opportunities. This legislation builds upon the 2017 Tax Cuts and Jobs Act, transforming the tax landscape in a significant way. Understanding these changes is crucial for business owners aiming to stay compliant and optimize their financial strategies. Here’s a straightforward guide to help you sift through the complexities and keep your business on track.

Big Change: Bonus Depreciation & Business Interest Deduction

The return of bonus depreciation is a welcome change for many. Businesses can now permanently expense 100% of qualified capital assets acquired from January 20, 2025. This includes manufacturing buildings placed in service before 2031. Additionally, the business interest deduction expansion returns the EBITDA-based limit. This provides larger deductions and comes with updated guidance on how these affect capitalization.

R&D and Other Deductible Expenses

Exciting news for innovation-driven companies—the R&D expensing rules have been reinstated. Domestic research costs are now fully deductible, and there is an accelerated recovery for 2022–2024 capitalized R&D. However, foreign R&D still requires amortization. There's also a change in meal deductions: on-site meals provided by employers will face limitations starting in 2026, but a carve-out exists for certain fishing businesses.

Updates to Income and Charitable Deduction Limits

The Qualified Business Income (QBI) Deduction permanently stands with a 20% deduction, with the phase-ins expanded to $75,000 for singles and $150,000 for joint filers. In terms of giving, a new 1% floor for corporate charitable deductions and a 0.5% of AGI floor for individuals who itemize were introduced.

Exemptions and Compliance Measures

Moving expense exclusions are now permanently repealed, except for active-duty military personnel. The IRS also has increased enforcement over the Employee Retention Tax Credit (ERTC), with enhanced authority and statute of limitations on potentially erroneous claims. For taxpayers affected by disasters, the permanent establishment of TCJA casualty loss rules now extends to state-declared disaster losses.

Despite these sweeping changes, proactive tax planning is the key to managing the impact of the One Big Beautiful Bill Act. With foresight and professional guidance, businesses can navigate these changes smoothly. We strongly encourage reviewing your current strategy with a tax professional to optimize compliance and benefits under these new rules.