The New US Budget Bill: 5 Things It Means for Businesses

Nicknamed the One Big Beautiful Bill, the legislation cleared Congress and was signed on July 4, 2025, marking a significant overhaul of recent tax provisions.

So what’s in it, and how might it affect your business?

Key Provisions That May Affect Your Business

Here’s a breakdown of the most relevant changes now enacted into law:

‍1. Pass-Through Income Deduction (Sec. 199A)
The 20% qualified business income (QBI) deduction is extended through 2029—providing continued relief for sole proprietors, partnerships, and S corporations. This extension preserves one of the cornerstone benefits from the 2017 Tax Cuts and Jobs Act.

2. Bonus Depreciation Reinstated
100% bonus depreciation is back. This means businesses can fully and immediately deduct the cost of qualifying equipment and machinery purchases, rather than depreciating them over several years. Like the QBI extension, this provision also runs through 2029.

3. R&D Expensing Simplified
Businesses can now deduct research and development costs right away instead of spreading them out over five years. This change also applies retroactively to 2022–2024, allowing amended returns to reclaim those expenses.

4. Broader Interest Deductions
The old cap on interest expense deductions—based on EBIT—has shifted to a more generous calculation based on EBITDA (earnings before interest, taxes, depreciation, and amortization). This change lets businesses deduct more interest, a big help for companies with heavy equipment or real estate costs.

5. Tax Breaks on Tips and Overtime
A new federal income tax exemption applies to up to $25,000 in tips and $12,500 in overtime pay for lower- and moderate-income workers. This aims to boost take-home pay and reduce payroll burdens for service-heavy industries.

Why This Matters to Small Businesses

Many of these measures build on the 2017 tax reform, with the goal of supporting business owners by:

• Extending popular deductions like QBI and bonus depreciation
  
  
• Increasing cash flow through immediate expensing of equipment and R&D costs.
  
  
• Offering tax exclusions on tips and overtime to help with compensation and retention.
  

Even though these provisions are set to phase out after 2029, they offer meaningful opportunities to lower your tax bill and reinvest in your business over the next several years.

What Should You Do Next?

The bill has already passed—which means these changes are now part of the tax landscape. It’s a good time to:

Want help understanding what this could mean for your payroll, taxes, or hiring strategy?

‍Let’s talk—our team is here to help you plan with confidence.