There are a ton of tax law changes in the One Big Beautiful Bill Act signed into law July 4th, some of which take effect in 2026, and some to act on before 2025 ends.

Read our list below to get an idea of what’s new, and be sure to reach out to our Tax Designers for details on how they’ll apply to your situation.

And don’t forget to also check our companion blog post which focuses on the changes the new law made for individuals.

Tax Law Benefits for Small Business

• One of the biggest questions for small business was whether the “Qualified Business Income Deduction” set to expire this year would continue — Good news: It is now a permanent part of the tax code. And, two small advantageous tweaks were added: (a) the phase-out ranges were widened (lessening potential reductions), and (b) a new minimum deduction of $400 was established as long as you have at least $1k from at least one business source.

• Another one that affects a lot of small business owners — the $10k cap on personal taxes paid to the state (often exceeded due to tax related to pass-through business profits) is now a $40k cap. The catch is it reverts back to $10k in 2029.

• You know all those annual 1099-NEC/ MISC your business may be issuing? After 2025, the reporting threshold will move from the $600 it’s been at for years, to $2,000. And it’ll now be indexed for inflation starting in 2026. This should help simplify year-end tax reporting.

• The 100% deprecation write-off first introduced in 2018 and which starting slowly disappearing in 2022 is now permanently back to 100% for property acquired after 19 January 2025. (The technical name of this deduction is the Special Depreciation Allowance under Sec 168(k)). What this means is that, going forward, many of your equipment purchases will qualify for a full deduction when you purchase them.

• Not to be confused, the competing depreciation provision under Sec 179 also got an enhancement: starting in 2025, up to $2.5 million in purchases can be completely written off in the year of purchase. (The choice of Sec 168(k) vs. Sec 179 is an advanced tax topic, and the short answer is it’s best to have our Tax Designers walk you through the choice.)

• And there’s now an altogether new depreciation category available as of 4 July 2025 for what’s being called ‘qualified production property’ — It’s essentially for domestic manufacturing operations and allows them to take applicable parts of real estate property costs that would normally be depreciated over 39 years, and convert that to a 100% write-off when spent.

• For employers paying for tax-free employee education assistance, this now permanently also includes payments against the employee’s student loans. And starting in 2026, the $5,250 limit will be increased annually for inflation.

• Research & development expenses are directly expensable again starting in 2025, and you can even optionally elect to retroactively apply this provision back to 2022 tax year. If desired, you can still decide to spread the costs out instead over not less than 60 months.

• One expanded employer tax credit is for wages paid to employees on family and medical leave, such as for the birth or adoption of a child, caring for a close relative in serious health condition, and other similar circumstances. This credit is now permanent after 2025, ranges between 12.5% to 25% of wages paid (essentially helping the employer afford to support their team member), and new, can even be claimed on premiums paid on family & medical leave policies themselves (regardless of whether an employee is currently claiming the leave).

• Employers who provide a childcare facility can get a now higher 40% – 50% credit up to $500k to $600k. Reminder: a credit is much more valuable than a deduction since it’s a dollar-for-dollar deduction in the tax bill, and not just a reduction in the income subject to tax.

• While mostly outside our customer base, another interesting small business tax law change is expanding which businesses can claim a tax credit for employer payroll taxes on tips. Originally this only applied to food and beverage businesses, but the credit is now available to beauty service businesses as well (such as barbering, nail care, spas, and similar).

Tax Law Drawbacks for Small Business

• The limit on claiming an excess business loss that was introduced in recent years, is now also permanent (it was otherwise set to expire in 2028). The gist of this change is that for applicable scenarios, you can’t claim a huge business loss against other income, but have to instead carry it over to the next year to use against only business income.

• Qualifying bicycle commuting benefits are no longer tax free after 2025, and the income exclusion historically provided for company-paid moving expenses is now permanently repealed as well.

More to Come

The above isn’t a full list, but a summary of provisions we see impacting our area of specialty working with small businesses. Many of the technical details in the 400 pages of the new tax law will be ironed out in the coming months, and as usual, please reach out to our Tax Design Team before making any changes to be sure the particular provision will work for your situation as intended — the tax code is riddled with tripwires and caveats, so it’s important to navigate with care.

And be sure to also check out our companion summary of what key tax law changes impacted individuals.