One, Big, Beautiful Bill provisions –
– and what that means for you as a business owner
Business owners gain several permanent tax advantages. The 20% deduction for QBI is now permanent, offering clarity to owners of pass-through entities. The bill also makes 100% bonus depreciation permanent, allowing companies to fully expense capital investments right away.
Workforce Related Updates
- Tips and Overtime Pay: Starting in 2025, tips and part of overtime income are no longer taxable. What’s important for employees to know is that only the “extra” portion (the half-time premium) is tax free. For example, if an employee normally earns $20/hour and makes “time and a half” ($30/hour) for overtime, only the extra $10 is tax-deductible. For employers, regular payroll tax rules still apply. But employers must report the portion of the employee’s pay that is qualified overtime separately on the W-2 form.
- Section 179D (Energy Efficient Commercial Buildings Tax Deduction): It’s been 20 years since the Energy Policy Act of 2005, which included Section 179D to reduce energy use, was signed into law. Businesses will no longer be able to claim this deduction starting in July of 2026. The OBBB phases out the popular deduction, but projects that begin construction before July 1, 2026 can still qualify, even if they’re completed later. This change affects developers, building owners, and contractors who’ve used 179D to offset costs for installing high-efficiency HVAC, lighting, and building envelope systems.
Business owners should evaluate how these provisions affect entity structure, capital investment plans, and workforce benefits. Not all companies will benefit equally, as outcomes depend on industry, size, and workforce composition.
How to Understand the Major Shift
The One Big Beautiful Bill reshapes both personal and business taxes by locking in lower rates, expanding deductions, and introducing new but sometimes temporary credits. At the same time, it trims certain safety net and environmental programs, showing the trade-offs built into the law.
For most individuals and families, this means greater certainty in planning, but also the need to track which benefits are temporary. Tax law is always evolving, and while the OBBB settles some questions, it also raises new ones. It’s normal to feel uncertain about what applies to you. That’s why professional guidance is so valuable.
