Major Tax Reform Law Brings Big Benefits to Businesses

July 30, 2025 Slattery & Holman, P.C.

Major Tax Reform Law Brings Big Benefits to Businesses

The recently enacted One, Big, Beautiful Bill Act (OBBBA) includes sweeping changes to the tax code that could significantly impact your business. While some provisions roll back previous incentives, many are highly favorable—especially for manufacturers, small businesses, and real estate investors.

Below, we highlight key areas of the law that may affect your 2025 tax planning and beyond.

Qualified Business Income (QBI) Deduction

Section 199A is here to stay. The OBBBA makes the QBI deduction for pass-through businesses and sole proprietors permanent.

  • Expands the phase-in thresholds to $75,000 (single) and $150,000 (joint)
  • Adds a minimum $400 QBI deduction starting in 2025 (indexed for inflation)
  • Applies to taxpayers with at least $1,000 of QBI from active businesses in which they materially participate

100% Bonus Depreciation Made Permanent

Businesses can now permanently deduct 100% of qualified property placed into service after January 19, 2025. That includes used assets.

  • Qualified production property placed in service between July 4, 2025, and 2031 also qualifies
  • Section 179 limits raised to $2.5 million with a $4 million phaseout threshold (indexed annually)

This is a major incentive for capital investment and equipment purchases.

Research & Experimentation (R&E) Expenses

Starting in 2025, businesses may again deduct domestic R&E costs in the year incurred.

  • Reverses the TCJA amortization rule
  • Applies retroactively (2022–2024) for small businesses (avg. receipts < $31 million)
  • Accelerated deductions over one or two years available for prior expenses

Rollbacks to Clean Energy Incentives

The OBBBA repeals or accelerates the expiration of several business clean energy credits:

  • Commercial clean vehicle credit ends after Sept. 30, 2025
  • Alternative fuel vehicle refueling property credit ends after June 30, 2026
  • Sec. 179D deduction for energy-efficient buildings is eliminated

Qualified Opportunity Zones (QOZs)

OBBBA makes the QOZ program permanent and enhances investor benefits:

  • Step-up in basis now begins after year 1
  • Initial gains must be realized in year 7
  • New rural-focused QOFs receive triple step-up in basis

First round of new QOFs launches January 1, 2027.

International Tax Changes

Key international provisions from the TCJA are now permanent:

  • FDII and GILTI deductions stay, now taxed at an effective rate of 14%
  • BEAT minimum tax raised to 10.5% starting in 2026

Employer Tax Incentives

Several employee-related credits and exclusions are now permanent:

  • Student loan payment exclusion: Adjusted annually after 2026
  • Child care credit: 40% for large businesses, 50% for small, up to $500K–$600K annually
  • Paid FML credit: Permanently extended to include premiums for FML insurance

Employee Retention Tax Credit (ERTC)

Important update for late filers:

  • No refunds will be issued for ERTC claims filed after January 31, 2024
  • The IRS now has 6 years to examine and challenge these claims

Other Notable Provisions

  • Business interest deduction: Expanded by excluding depreciation, amortization, and depletion from ATI
  • Excess business loss limitation: Made permanent
  • New Markets Tax Credit: Permanently extended

How Will the OBBBA Affect Your Business?

The OBBBA delivers long-term clarity to several areas of business tax planning. While the law doesn’t create major structural overhauls, the permanence of many popular incentives provides planning opportunities for years to come.

Ready to plan ahead? Contact our team today to discuss how these changes impact your specific situation. We’re here to help you navigate the road ahead.

 

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