What the ‘One Big Beautiful Bill Act’ means for your business
The 2025 legislation has implications for businesses of all sizes.
The sweeping tax and spending law signed on July 4, 2025, dubbed the One Big Beautiful Bill Act, includes key provisions and potential tax planning opportunities for businesses and their owners.
The scope of the changes emphasizes the value of having a collaborative professional team, in which your trusted financial, tax and accounting advisors work together to consider your unique circumstances.
Noteworthy tax filing provisions for businesses to consider:
Section 179 expenses
Businesses can elect to immediately expense qualifying property placed in service during the specified time. The maximum deduction increased from $1.25 million to $2.5 million, however, it begins to phase out when total qualifying investments exceed $4 million.
Domestic research and experimental expenditures
Businesses can expense domestic research and experimental expenditures beginning January 1, 2025. The new law also adds an amortization option, where the Tax Cuts and Jobs Act of 2017 required businesses to amortize these costs over five years.
Manufacturing and business property incentives (Section 168)
Companies can fully expense qualified production property* in year one. Qualified production property includes properties involved in manufacturing, producing or refining qualified products in the United States.** Previously, businesses were required to deduct the cost of nonresidential real property over a 39-year period. In addition, Section 168(k) permanently reinstates 100% bonus depreciation for qualified property placed in service after January 19, 2025.
Qualified small business stock (QSBS)
Shareholders can exclude a percentage of gains from qualifying shares held for three years or more. The maximum gain exclusion increases from $10 million to $15 million, and the QSBS gross asset level increases from $50 million to $75 million. Both limits will be adjusted for inflation beginning in 2027. Changes affect shares acquired after July 4, 2025.
Small business deduction (Sec 199A)
The 20% deduction for qualified business income becomes permanent. Sole proprietorships, partnerships, S corporation owners and some LLC owners may be able to deduct up to 20% of their qualified business income. Qualified real estate investment trust dividends and qualified publicly traded partnership income remains eligible for a 20% deduction for eligible taxpayers. Notably, taxpayers with at least $1,000 in qualified business income under Section 199A are now entitled to a minimum deduction of $400.
As you review these takeaways, consider which provisions could apply to you or your business. Additionally, the legislation made changes that will impact personal tax planning for most US filers, including increased standard deductions, bonus deductions for seniors and more.
Planning ahead will help you maximize opportunities.
*Construction must begin after Jan. 19, 2025, and before Jan. 1, 2029, and property must be placed in service before Jan. 1, 2031.
**Must be built or bought between January 19, 2025, and December 31, 2028, and be put into service (i.e., ready and used) before January 1, 2031.
Raymond James does not provide tax or legal advice. Please discuss these matters with the appropriate professional.