How will the One Big Beautiful Bill Act affect your business?
The One Big Beautiful Bill Act of 2025 brings a host of changes that will sweep US tax law, affecting deductions, credits, and savings accounts across the board. To help you sift through all the legislation and ongoing updates, we’ve compiled a list of the key aspects that will impact how businesses file their 2025 tax returns. For additional information on how individual tax returns will be affected by this bill, we’ve created a blog with the most pertinent highlights. (Click here to learn more from this blog.)
Here are the business highlights…
1) New Research and Development Expense Deduction Amount
- Originally, any company with research and development expenses for creating new products, software, etc. were required to amortize (or write off over time) these expenses over 5 years on the tax return. Businesses are now allowed to deduct 100% of the full amount.
- Retroactively effective 1/1/2022
2)New 1099-NEC & 1099-Misc Requirements
- For several years, a Form 1099 has been issued to report miscellaneous income for individuals and companies who have been paid $600 or more in non-employee service payments (rent, prizes, service, etc). The threshold to send a 1099-NEC and 1099-Misc is now $2,000 or more.
- The limit to report royalty income, payments to lawyers, and medical payments is unchanged at $10 or more.
- Effective 1/1/26
3) Increase in Section 179 Depreciation Expensing
- The write-off limit for Section 179 depreciation (allowing businesses to write off qualified purchases made in 2025) was originally $1,250,000 and has now increased to $2,500,000.
- Effective 1/1/25
4) New Tax Rules on the Sale of Farmland
- Farmers can now pay the tax for the sale of farmland over 4 years versus the original requirement that they pay 100% of the tax due in the year of the sale.
5) Qualified Business Income Deduction Made Permanent
- Originally, the qualified business income deduction of 20% off business profits was set to expire in 2026. Now, it has been made a permanent 20% deduction.
- Effective 1/1/2025
6) Bonus Depreciation Made a Permanent Deduction
- Originally, the bonus depreciation limit (which allows businesses to immediately deduct a percentage of qualified purchases such as machinery and equipment in the initial year of the purchase) was set to expire in 2026. Now, it has been made a permanent 100% deduction.
- Effective 1/19/2025, the date of the presidential inauguration. Please note this is not retroactively effective 1/1/2025, as with many other effective dates.
As the One Big Beautiful Bill Act continues to be fleshed out, more information about the timeline of these changes and other corresponding details will circulate on the internet and in the media. We know you will have many questions, so please be assured that we’ll continue to provide relevant updates and resources to keep you informed and give you peace of mind. Our utmost priority is making sure that you feel financially capable of understanding the ever-changing shifts in our economy.
Have questions about this bill? Or interested in a consultation to further discuss the details? Click here to contact us now. Or click here to learn more about our Tax, Business, and Financial Planning & Investment services.
Want to learn more? Here are additional resources for you…
The One Big Beautiful Bill: Legislation for Historic Prosperity and Deficit Reduction – The White House
“One Big Beautiful Bill Act” Tax Policies: Details and Analysis – The Tax Foundation
Blog by Kim Storen, EA – Senior Tax Accountant
Learn more about Kim and the rest of the Storen Financial team here.