6 Small Business Takeaways From the One Big Beautiful Bill Act (OBBBA)
Washington has just passed one of the most significant pieces of tax legislation in decades. The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, extends (and even makes permanent) many provisions of 2017’s Tax Cuts and Jobs Act (TCJA) while also introducing a host of new adjustments to the U.S. tax code.
While the legislation touches nearly every corner of the tax landscape, small and midsize business owners should pay particularly close attention. That’s because several key updates in the OBBBA could affect your company’s tax planning for years to come.
Here’s a breakdown of the provisions most relevant to small business owners.
1. The QBI Deduction Is Made Permanent
One of the TCJA’s most popular perks for small businesses — the 20% Qualified Business Income (QBI) deduction (also known as Section 199A) for pass-through entities — was set to expire in 2025.
The OBBBA not only makes this deduction permanent, but it also adjusts the eligibility thresholds. The phase-in range for wage and property limitations (and exclusion of specified service trades or businesses) was previously $50,000 and $100,000 above the income threshold for single and joint married filers, respectively. It will be increased to $75,000 and $150,000, respectively, in 2026, then indexed to inflation thereafter.
The budget reconciliation bill also adds a new minimum deduction of $400 as long as your aggregate QBI is at least $1,000. The deduction also starts in 2026 and will be indexed to inflation thereafter.
2. Bonus Depreciation: Around for Good
Under the TCJA, businesses could fully and immediately expense qualifying assets through 100% bonus depreciation (initially), though it was in the midst of phasing out. The original phase-out schedule:
- 2023: 80%
- 2024: 60%
- 2025: 40%
- 2026: 20%
- 2027: 0%
However, the passage of the OBBBA has made bonus depreciation permanent, applying to qualifying property placed into service after Jan. 19, 2025.
3. Immediate R&D Expensing Returns
One of the less celebrated but highly disruptive TCJA changes was the requirement, starting with the 2022 tax year, to amortize domestic research and development (R&D) expenses over five years rather than deducting them in the year they were incurred.
However, the OBBBA has reinstated immediate R&D expensing. In other words, domestic R&D expenses become fully deductible in the year in which those expenses occurred. Also, companies will be able to amend their returns for 2022 through 2024 to recover amortized costs.
4. Business Interest Deductions Get a Boost
The budget reconciliation bill also reverts the business interest deduction limitation to a more favorable calculation.
Specifically, starting with the 2022 tax year, taxpayers couldn’t add back depreciation and amortization in determining adjusted taxable income. However, with the passage of the OBBBA, the EBITDA-based interest deduction limitation has been restored starting in the 2025 tax year — meaning taxpayers can add back depreciation and amortization when determining adjusted taxable income.
5. BEAT Rate Will Increase Less Than Expected
The Base Erosion and Anti-Abuse Tax (BEAT) was scheduled to increase, to 12.5% from 10%, starting with the 2026 tax year. However, the passage of the budget reconciliation bill made permanent a much smaller increase, to just 10.5%, starting with the 2026 tax year.
6. Higher Immigration Fees
Employers who employ and sponsor foreign workers could be affected by an array of new and higher fees resulting from the OBBBA.
For instance, there’s a new $100 fee for underlying applications for asylum (plus $100 per year for every year the application is pending), as well as Temporary Protected Status ($500 fee, also adjusted each year). There’s also an increased fee of $550 for Employment Authorization Documents (EADs) requested by individuals with TPS, as well as parolees and asylum applicants.
Among other new fees? $1,050 for Waivers of Inadmissibility, $250 Visa Integrity Fee for nonimmigrant visa issuance, and a $24 fee for Form I-94.
Not Sure How OBBBA Impacts Your Business?
New tax laws often come with opportunity … but also risk. The One Big Beautiful Bill Act extends some valuable tax breaks while introducing a host of changes that could reshape your business’s tax position.
McManamon & Co. is an accounting, tax, fraud, forensic and consulting firm that serves small and midsize businesses. Our experienced tax team can help you navigate how the OBBBA impacts your unique situation — whether that’s maximizing your deductions, optimizing your entity structure or planning smarter for the years ahead.
Call us at 440.892.8900 or contact us online today start your OBBBA strategy session.
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