The One Big Beautiful Bill Act (OBBBA) is now law, and it delivers some major wins for small businesses. Here’s a breakdown of the most important changes and how they might affect your tax planning.
🏢 The 20% Business Income Deduction Is Now Permanent
Previously set to expire after 2025, the 20% Qualified Business Income (QBI) deduction is now a permanent part of the tax code. Plus: – A minimum $400 deduction is now guaranteed for active business income over $1,000 – Higher income thresholds mean more business owners can qualify (up to $75,000 single / $150,000 joint)
Bottom line: Even modest profits can now get you a tax break, and long-term planning just got easier.
🏠 100% Bonus Depreciation Is Here to Stay
Businesses can now permanently deduct 100% of the cost of eligible property the year it’s placed in service — including certain manufacturing-related real estate.
Example: You buy a $500,000 machine for your shop in February 2025. Instead of depreciating it over five years, you deduct the full $500,000 this year.
This can significantly improve cash flow for equipment-heavy businesses.
💼 Section 179 Limits Increased
The Section 179 expense limit jumps to $2.5 million, with the phaseout starting at $4 million — both indexed for inflation.
That means more small and mid-sized businesses can fully expense equipment purchases rather than spreading them out over time.
💊 Better Tax Breaks for Startups and Investors
Changes to Qualified Small Business Stock (QSBS) make it more attractive to invest in startups: – Gain exclusions now phase in: 50% after 3 years, 75% after 4, and 100% after 5 – The lifetime per-issuer cap increases to $15 million – The gross asset test increases to $75 million
Founders, early employees, and investors stand to benefit more — especially with long-term holds.
📝 Simpler 1099 Reporting Rules
Big relief for gig workers and small businesses: – 1099-K threshold goes back to $20,000 and 200 transactions (was $600) – 1099-NEC and 1099-MISC thresholds rise to $2,000 (indexed for inflation)
Fewer forms, less confusion, and less hassle at tax time.
❌ Clean Energy Credits Are Ending Sooner
Several clean energy incentives are getting cut short: – Electric vehicle credits (new/used) end after Sept. 30, 2025 – Home energy improvements must be placed in service by Dec. 31, 2025 – Commercial clean vehicle credits end after Sept. 30, 2025 – Alternative fuel refueling credit ends June 30, 2026
If you’re considering these types of investments, act soon to take advantage before the window closes.
Want to Maximize These New Breaks?
We can help you review your purchases, structure your investments, and update your tax plan to take full advantage of these new rules.
📞 Contact LP Tax & Bookkeeping Pros in Greenville, TX
Ralph Pinney | 303-881-9762