100% bonus depreciation is back permanently, Section 179 doubled to $2.5M, R&D expensing returned with a refund-generating catch-up for 2022–2024, and the 20% QBI deduction is permanent. The year-end moves that make each one count.
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, is the biggest rewrite of business taxation since 2017 — and almost all of it favors owners of S corporations, partnerships, and LLCs. But several of the best provisions only pay off if you act before December 31. Here’s what actually changed, with the noise stripped out.
Bonus depreciation had been phasing down (60% in 2024, headed to zero). OBBBA restored 100% first-year expensing, permanently, for qualified property acquired and placed in service after January 19, 2025. Equipment, vehicles (within luxury-auto limits), machinery, computers, furniture, and qualified improvement property can all be written off in full in year one.
Two planning notes:
The Section 179 limit jumped to $2.5 million, phasing out above $4 million of purchases (2025 figures, indexed for inflation going forward). For most small businesses, bonus depreciation now covers everything anyway — but 179 still matters for some state returns and for certain building components (roofs, HVAC) that bonus doesn’t reach.
Since 2022, businesses had to spread U.S. research and software-development costs over five years instead of deducting them — a cash-flow disaster for anyone building products. OBBBA restored full first-year deduction of domestic R&D (new Section 174A). Foreign R&D still amortizes over 15 years.
The part most owners haven’t heard: there’s a catch-up for R&D you were forced to capitalize in 2022–2024. Smaller businesses can even amend those returns and claim refunds. If you paid developers, engineers, or product designers in those years, this is worth a specific conversation — there may be a check in it.
The qualified business income deduction was scheduled to die after 2025. It’s now permanent at 20%. (You may have read 23% somewhere — that was in an early House draft and did not make the final law.) With QBI locked in, the S corp vs. partnership vs. C corp question deserves a fresh look, because the answer that was right for a temporary deduction may change when it’s permanent.
| Change | What it means |
|---|---|
| SALT cap raised to $40,000 | Owners in high-tax states may finally deduct their state taxes personally — and state pass-through entity tax (PTET) elections remain a valid workaround for income above the cap. |
| 1099-K threshold restored | Back to $20,000 and 200 transactions — the on-again, off-again $600 rule is gone. |
| 1099-NEC/MISC threshold raised | From $600 to $2,000 starting with payments made in 2026 — fewer forms to issue next January. |
| New factory expensing | “Qualified production property” — U.S. manufacturing buildings placed in service after July 4, 2025 — can be fully expensed. |
None of this requires exotic structures — it’s ordinary planning with a new rulebook. The owners who lose out are the ones who first hear about these rules when their 2026 return is being prepared.
Talk it through with a licensed US tax professional — we'll tell you honestly whether it applies to your situation.
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