One Big Beautiful Bill Summary: What It Means for Your Business [2026]

TL;DR: The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, is the most sweeping tax and spending overhaul since the 2017 Tax Cuts and Jobs Act. It permanently extends TCJA individual tax rates, introduces 100% bonus depreciation for businesses, eliminates most clean energy tax credits, and creates new deductions for tips and overtime. If you run a business in the US, this law reshapes your tax liability starting in 2026.

What Is the One Big Beautiful Bill?

The One Big Beautiful Bill Act (Public Law 119-21) is a comprehensive budget reconciliation package that President Trump signed on July 4, 2025. The bill passed the Senate on July 1, 2025, and the House of Representatives on July 3, 2025, along strict party lines using the reconciliation process.

At its core, the OBBBA does three things: it makes the expiring 2017 Tax Cuts and Jobs Act (TCJA) provisions permanent, it introduces new tax benefits for workers and families, and it cuts roughly $1.1 trillion in federal spending over the next decade — primarily by repealing clean energy incentives enacted under the Inflation Reduction Act.

According to the Tax Foundation, the major tax provisions will reduce federal revenue by nearly $5.2 trillion from 2025 to 2034 on a conventional basis. On a dynamic basis (accounting for projected GDP growth of 0.7%), the revenue cost falls to $4.3 trillion. Combined with spending cuts, the bill increases federal deficits by an estimated $3.3 trillion over the decade.

This is not a minor tweak. The OBBBA affects every business and individual taxpayer in the United States.

Key Provisions That Affect Businesses

Permanent 100% Bonus Depreciation

The OBBBA permanently restores 100% bonus depreciation for qualified business equipment and property. Under prior law, bonus depreciation had begun phasing down from 100% in 2023 to 80%, 60%, and so on. This is now permanent — businesses can immediately deduct the full cost of qualifying assets in the year they are placed in service.

Permanent R&D Expensing

Domestic research and experimental (R&E) expenditures can once again be fully expensed in the year incurred, reversing the 2022 requirement to amortize R&D costs over five years. Some retroactive R&D expensing back to 2021 is available in certain cases. This is a major win for tech companies, manufacturers, and any business investing in innovation.

Business Interest Expense — EBITDA Standard Made Permanent

The limitation on business interest expense deductions now permanently uses the more generous EBITDA-based calculation rather than the EBIT standard that was scheduled to take effect. This means businesses can deduct more interest expense, benefiting highly leveraged companies and capital-intensive industries.

Factory Expensing Through 2028

Businesses can expense the cost of constructing or expanding domestic manufacturing facilities through 2028. This provision is designed to accelerate reshoring and domestic factory investment.

Third-Party Payment Threshold Restored to $20,000/200 Transactions

The OBBBA restores the 1099-K reporting threshold to $20,000 in payments AND 200 transactions per year, replacing the $600 threshold that had been scheduled under prior law. Gig workers, freelancers, and small sellers on platforms like Etsy, eBay, and Venmo benefit significantly.

Clean Energy Credits — Mostly Repealed

Most IRA-era clean energy tax credits are repealed, including the electric vehicle tax credit, residential clean energy credits, and several advanced manufacturing credits. Effective dates vary by provision, but the direction is clear: businesses that built strategies around clean energy incentives need to reassess immediately.

Industry-by-Industry Impact

Winners

Manufacturing: Permanent bonus depreciation, factory expensing through 2028, and restored R&D expensing create a powerful incentive stack. Domestic manufacturers are the biggest winners under this law.

Technology & Software: Permanent R&D expensing eliminates the five-year amortization burden that was crushing cash flow for R&D-heavy companies. SaaS, biotech, and hardware firms benefit immediately.

Real Estate & Construction: Permanent bonus depreciation applies to qualifying real property improvements. The EBITDA-based interest limitation helps leveraged real estate investors. Opportunity Zones are now permanent with a new 30% rural basis step-up.

Gig Economy & Small Sellers: The $20,000/200-transaction 1099-K threshold means most casual sellers and gig workers avoid burdensome reporting. The tip and overtime deductions directly benefit service workers.

Traditional Energy: With clean energy credits phased out, traditional energy companies face less subsidized competition. Oil, gas, and coal producers benefit from a more level playing field.

Losers

Clean Energy & EVs: The repeal of IRA clean energy credits is devastating. Solar installers, EV manufacturers, battery producers, and wind energy developers lose their primary federal incentive structure. Companies like Tesla, Rivian, and domestic solar firms face immediate margin pressure.

Healthcare (ACA-dependent): Changes to premium tax credit repayment rules and the expiration of enhanced ACA subsidies affect insurers and healthcare providers serving exchange populations.

High-Tax State Residents & Businesses: While the SALT cap temporarily increases to $40,000 for 2025-2029, it reverts to $10,000 in 2030. Businesses and individuals in New York, California, New Jersey, and Illinois face continued limitations on state and local tax deductions.

Timeline and What to Expect

| Date | Event | |------|-------| | July 4, 2025 | OBBBA signed into law (Public Law 119-21) | | 2025 tax year | Enhanced standard deduction, tip/overtime deductions begin, SALT cap increases to $40,000, child tax credit increases to $2,200 | | January 1, 2026 | Most major provisions take effect — permanent tax rates, HSA expansions, bronze/catastrophic plan HSA eligibility | | July 4, 2026 | Trump Accounts funding begins — $1,000 federal contribution per eligible child | | 2026-2028 | Factory expensing available, tip/overtime deductions continue | | 2029 | SALT cap begins reverting (1% annual increase ends) | | 2030 | SALT cap returns to $10,000 flat |

The IRS and Treasury are actively issuing guidance throughout 2026. Proposed regulations on Trump Accounts, backup withholding changes, and HSA expansions are already published. Expect additional technical guidance and potential corrections legislation from Congress.

What This Means for Your Business

Reassess your capital expenditure strategy. Permanent 100% bonus depreciation means there is no longer a "use it or lose it" urgency — but the incentive to invest in equipment, technology, and property improvements is now a permanent feature of the tax code.

Rethink R&D budgeting. If your company delayed R&D spending because of the five-year amortization requirement, the constraint is gone. Full expensing of domestic R&E is back and permanent. Explore whether retroactive claims apply to your 2021-2024 filings.

Audit your clean energy positions. If your business strategy relied on IRA-era tax credits — EV credits, residential solar, advanced manufacturing — you need to model the impact of their repeal immediately. Transition plans should be underway.

Review your entity structure. The permanent extension of TCJA rates, combined with new deduction opportunities (tips, overtime, senior deduction), may change the optimal entity structure for pass-through businesses.

Plan for SALT reversion. The temporary SALT relief ($40,000 cap through 2029) buys time, but it reverts to $10,000. Businesses and high-earning individuals in high-tax states should plan entity-level tax elections and potential relocations before 2030.

Update compliance processes. The 1099-K threshold change, new HSA eligibility rules, and Trump Account employer contribution options all require payroll and benefits system updates.

Frequently Asked Questions

Q: When did the One Big Beautiful Bill become law? A: President Trump signed the One Big Beautiful Bill Act into law on July 4, 2025, as Public Law 119-21. It passed the Senate on July 1 and the House on July 3, 2025, through the budget reconciliation process.

Q: Does the bill make the 2017 tax cuts permanent? A: Yes. The OBBBA permanently extends the individual income tax rates established by the 2017 Tax Cuts and Jobs Act. Without this law, rates would have reverted to higher pre-2017 levels starting in 2026. The seven-bracket structure (10% to 37%) is now permanent.

Q: What is the new SALT deduction cap? A: The state and local tax (SALT) itemized deduction cap increases temporarily to $40,000 for 2025, rising by 1% annually through 2029. It reverts to $10,000 in 2030. The higher cap phases out for taxpayers with income above $500,000.

Q: Are electric vehicle tax credits still available? A: Most EV tax credits from the Inflation Reduction Act are repealed under the OBBBA. The exact phase-out dates vary by provision, but the federal EV purchase credit is being eliminated. Check IRS guidance for specific transition rules and effective dates.

Q: What are Trump Accounts? A: Trump Accounts are new tax-advantaged savings accounts for children, modeled after 529 plans and IRAs. The federal government contributes $1,000 per eligible child, and individuals/employers can contribute up to $5,000/year. Funds must be invested in US stock index funds and generally cannot be withdrawn before age 18. Funding begins July 4, 2026.

Q: How does the bill affect small businesses? A: Small businesses benefit from permanent 100% bonus depreciation, restored R&D expensing, the higher 1099-K threshold ($20,000/200 transactions), and the EBITDA-based interest limitation. Pass-through businesses also benefit from the permanent individual rate structure.

Q: Is the "no tax on tips" provision permanent? A: No. The tip income deduction is temporary, available for tax years 2025 through 2028. It applies to workers in customarily tip-receiving positions as defined by IRS guidance, with income phase-outs above $150,000 ($300,000 for joint filers).

Q: How much does the bill add to the federal deficit? A: According to the Tax Foundation, the OBBBA increases federal deficits by approximately $3.3 trillion over 2025-2034 on a dynamic basis (accounting for economic growth). The debt-to-GDP ratio is projected to rise by 12 percentage points by 2034.

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Analysis by the Legiseye team. Sources: IRS.gov, Tax Foundation, Congress.gov. Stay ahead of US legislation at legiseye.com.