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The U.S. tax system is set to bring some major changes before 2026. The One Big Beautiful Bill Act (OBBBA) is a big deal for business owners. The OBBBA law is a federal statute signed on July 4, 2025, as Public Law 119-21. It comprises the core of President Trump’s second-term economic agenda.
Many business owners may not yet realize the impact of this law. But it’s important to know before you file your 2026 tax return. It makes some old tax benefits permanent, while adding new rules for better functioning. This law is highly crucial for small businesses, LLCs, S-Corps, and companies with employees.
In this guide, we’ll look at the OBBBA law, its importance, and important facts that business owners should keep in mind now.
The One Big Beautiful Bill Act (OBBBA) is a new tax law in the United States. It brings major changes to both business and personal taxes. The OBBBA law is directly related to the Tax Cuts and Jobs Act of 2017 (TCJA).
Many of the benefits of the TCJA were scheduled to expire after 2025. Then, the law made many previous tax benefits permanent with additional new benefits. Plus, it makes TCJA provisions permanent, including estate tax exemptions, tax rates for individuals, and bonus depreciation, while adding new tax breaks for senior citizens.
The OBBBA made most of those benefits permanent, allowing business owners to plan for the long term. Some parts of the law go into effect in 2025, and the impact will be clearly visible in 2026 tax filings. So, it’s important to understand this in advance.
The major tax changes are:
These changes can affect both your business’s taxes and cash flow.
The OBBBA implementation is more than just a tax update for business owners. It’s a huge opportunity for long-term planning. The new law has reduced uncertainty and made investment decisions easier.
Major importance of OBBA for US Business Owners:
Risks to consider:
This law can bring big benefits to businesses with proper planning.
The OBBBA brings several major tax benefits to businesses. These changes are important for small businesses, LLCs, S-corps, and self-employed individuals. Here are the major benefits explained below.
Many popular tax benefits of the 2017 TCJA have now been made permanent. These benefits were supposed to expire after 2025, but the new law will give business owners to enjoy long-term security.
Key changes:
This permanence is very important in business planning. Previously, many owners were not sure about the benefits. Now they can plan long-term investments, hiring, and expansion.
The OBBBA has reinstated 100% bonus depreciation, effective January 19, 2025. This creates a significant cash-flow benefit for businesses.
You can deduct the full cost of qualifying business assets (such as machinery, equipment, and certain interior improvements) in the first year you purchase them. Previously, this benefit was phased out.
Eligible
Both new and used properties can qualify, as long as they meet the rules. It reduces taxes in the year when the major purchase has been done.
The OBBBA made the 20% Qualified Business Income (QBI) deduction under Section 199A permanent. This is a big advantage for pass-through businesses.
Eligible are:
Businesses that do not pay separate corporation tax generally get this benefit. There are some limitations on high income, especially for service businesses. So personal income levels are important.
A maximum deduction of 20% of the eligible portion of business profits can be taken on a personal return. Previously, there was a fear that this benefit would end. Now that it is permanent, pass-through businesses will be able to plan long-term taxes.
Re-evaluating the business structure (LLC vs. C-corp) can lead to additional savings in many cases.
Another major change to the OBBBA is that domestic research and development (R&E) costs can now be deducted immediately. Previously, these costs had to be written off for over 5 years. Now, eligible R&D costs can be deducted in full in the year they are incurred.
In some cases, relief may also be available for costs that had to be amortized in 2022–2024 (via an amended return, if eligible).
The most benefited are:
The immediate deduction means lower taxes in the first year. This leaves the business with more cash on hand to reinvest.
The State and Local Tax (SALT) deduction limit has been temporarily increased from $10,000 to $40,000 (for the period 2025–2029) under the OBBBA.
Key points:
This change is especially beneficial for business owners in high-tax states. Many states also have pass-through entity tax (PTET) systems in place, which can provide additional benefits to SALT plans.
In short, business owners who previously could not take full deductions due to the SALT limit can now get more benefits.
The OBBBA has introduced a new temporary tax relief for employees, which will also affect business payroll plans.
Key benefits:
This is not a completely tax-free deduction but rather an above-the-line deduction. Employers are now required to track tips and overtime separately on Form W-2. In addition, the new Schedule 1-A can be used on personal returns.
In businesses where employees earn a lot of tips or overtime, this rule can provide additional net income to employees.
The new law expands the Estate and Gift Tax exemption limits. This helps business owners plan for the future. Now, the tax burden on large asset transfers can be relatively less.
Key changes are:
This change makes business succession planning much easier. Previously, many families had to sell their businesses to pay taxes. Now that the pressure can be reduced. Family businesses, real estate owners, and high-net-worth individuals will benefit the most.
The OBBBA not only reduced taxes but also introduced some new compliance responsibilities. Business owners should prepare now. Here are the key changes.
Higher 1099-K Threshold Restored
Many small sellers will now be spared from the unnecessary 1099-K forms. But accurate recordkeeping is still essential.
Increased I-9 Audits and Immigration Costs
Employer risk areas:
Businesses will need to tighten HR and compliance processes.
New W-2 Reporting Requirements
Businesses that have a high tip base (such as restaurants) should prepare quickly.
OBBBA has opened the door to new benefits for employees. Smart employers can use them to retain good talent.
New benefits:
Opportunities for employers:
While OBBBA offers many benefits, improper planning can harm your business. So, it is important to know some common risks in advance.
Mistakes to avoid:
You will not get the full benefit of good laws without proper planning.
Business owners should take some practical steps now to get the full benefit of the OBBBA.
What you should do:
You should talk to a tax professional in advance for better compliance. It will help you to make the next filing season much less stressful.
OBBBA is one of the biggest tax changes in our time. This has created new opportunities for businesses, lower taxes, more investment incentives, and improved employee benefits. However, these opportunities will only be useful if the business owner plans.
It is very important to create the right strategy before filing your return. You should always be prepared in advance because delaying can lead to missing out on many benefits. So, you should review accounts, update systems, and seek expert advice now.
Enterslice offers complete support for businesses from tax planning, compliance management, to strategic advisory services. Contact our expert team today and adapt your business to the new tax rules and move forward with confidence.
The One Big Beautiful Bill Act (OBBBA) is a major U.S. tax and economic reform law. It made many of the key benefits of the 2017 TCJA permanent and added some new tax relief. The goal of the law is to increase business investment, encourage employment, and provide long-term stability in tax planning. This is the most important thing for small and medium-sized businesses.
Many of the OBBBA rules have been in effect since 2025. Some benefits will take full effect in 2026 and beyond. For example, 100% bonus depreciation has returned from 2025. So, business owners should plan new rules now. Preparing in advance will make your next tax filing much easier.
The permanent QBI deduction benefits pass-through businesses the most. This includes LLCs, S-corps, and sole proprietors. If the business profits go directly to the owner's personal return, then this benefit is usually available. Income limits and business types are important to avail these benefits.
This rule is very useful for small businesses. If a business buys new or used equipment, the entire cost can be shown as a deduction in the first year. This reduces taxable income, so more cash will be available. Earlier, depreciation had to be taken over several years. Now the business can save on taxes and quickly increase investment.
Yes, businesses can amend their R&D (Research & Experimentation) expenses for 2022–2024. The new rules again allow immediate expenses. This is more convenient than the previous amortization rules. However, there is a deadline for making amendments. So, it is better to review your previous returns from a tax professional without delay.
According to the OBBBA, the SALT (State and Local Tax) deduction cap has been temporarily increased from $10,000 to $40,000 (years 2025–2029). However, it may be gradually phased out for high-income taxpayers. This change is beneficial for business owners in high-tax states. However, the pass-through workaround should be considered separately.
Not completely tax-free, but the OBBBA has provided a deduction of benefits within certain limits. Eligible employees can deduct up to $25,000 in tips and up to about $12,500 in overtime income per year. So, accurate reporting is very important. Both employees and employers will have to keep accurate records of their income under the new rules.
Employers will now have to report tips and overtime separately on their W-2 forms. This means that updating payroll systems has become a necessity for many businesses. Incorrect reporting can increase the risk of fines or audits. In addition, more care is now being taken in verifying I-9s and maintaining employee records.
The OBBBA has increased the estate and gift tax exemption to about $15M (individual) and $30M (married). The tax burden during the transfer of a business inheritance can be reduced. Family business owners can now arrange trusts, share transfers, or succession plans. Those who own large assets should update their estate planning now.
Businesses should first review their taxes and operations to prepare for 2026. It is a good idea to review their capital expenditure plan and entity structure first. Then, you should update your payroll system, do an I-9 audit, and do a cash-flow projection. Most importantly, you should contact a tax professional in advance to create a clear plan according to the new rules.
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