One Big Beautiful Bill: Tax Opportunities Business Owners Should Know in 2026

By LocateMyWealth Research · Published September 8, 2026 · Last updated September 8, 2026

This content is for educational purposes and is not individualized tax, legal or investment advice. Tax rules depend on individual circumstances. Consult a qualified tax professional.

Since it was signed into law on July 4, 2025, the One Big Beautiful Bill Act (OBBBA) has rewritten a number of the business tax rules that entrepreneurs and small-business owners plan around every year. Several provisions that were scheduled to shrink or disappear under the 2017 Tax Cuts and Jobs Act (TCJA) were instead extended, expanded, or made permanent — while a few limitations were also tightened or reshaped.

This article is a plain-English map of the provisions most relevant to business owners: bonus depreciation, Section 179 expensing, the Qualified Business Income (QBI) deduction, the business interest expense limitation, domestic research expensing, and Opportunity Zones. It is general education, not a substitute for a conversation with your own CPA about your specific facts.

What Is the One Big Beautiful Bill?

The One Big Beautiful Bill Act is a wide-ranging federal tax and spending law enacted in 2025 that extends and modifies many TCJA provisions that were otherwise set to expire, while introducing new rules of its own. The IRS and Treasury have been issuing implementation guidance in phases — including a January 2026 notice clarifying aspects of the amended bonus depreciation rules 1 — so some mechanical details are still being clarified even as the core provisions are already in effect.

For business owners, the headline changes cluster around capital investment (how quickly you can deduct the cost of equipment and property), pass-through income (the QBI deduction), financing costs (the interest expense limitation), and innovation spending (R&D expensing).

100% Bonus Depreciation Is Back — and Made Permanent

Under the TCJA, bonus depreciation started at 100% but was scheduled to phase down by 20 percentage points each year, reaching 40% in 2025 and continuing toward zero. OBBBA reset the bonus depreciation rate under Section 168(k) back to 100% for qualifying property acquired and placed in service after January 19, 2025, and removed the scheduled phase-down, which is why it is commonly described as "permanent" going forward 2 4.

Key mechanics to understand:

• What qualifies. Generally, tangible personal property with a recovery period of 20 years or less — machinery, equipment, computers, furniture, and certain qualified improvement property — not the land or long-life structural components of a building.
• Placed-in-service timing matters. Property placed in service before the January 19, 2025 effective date generally still follows the pre-OBBBA phase-down percentages, so the acquisition date and placed-in-service date both matter for mixed-year purchases.
• Guidance is still developing. The IRS issued interim guidance on the amended additional first-year depreciation deduction in January 2026, and further regulatory clarification is expected on edge cases such as long-production-period property and transition-year elections 1.

Section 179 Expensing Gets a Higher Ceiling

Section 179 is a separate, elective expensing provision that lets a business immediately deduct the cost of qualifying property up to an annual dollar cap, subject to a phase-out once total purchases exceed a threshold and a further limit tied to business taxable income. OBBBA increased the Section 179 dollar limits, and the amount is indexed for inflation going forward; for tax years beginning in 2026, the deduction limit is reported at $2,560,000, with the phase-out beginning once qualifying purchases exceed roughly $4,090,000 5 6.

Because Section 179 is capped by business taxable income and phased out for larger spenders, many capital-intensive businesses will rely primarily on bonus depreciation, using Section 179 selectively — for example, to fine-tune taxable income in a given year. Confirm current-year figures with your CPA, since these dollar thresholds are adjusted annually for inflation.

Worked Example: $100,000 of Equipment, Before vs. After

The following is an illustrative, simplified example. It ignores state tax, assumes a flat federal marginal rate, and is not a projection for any specific taxpayer.

Assume a business places $100,000 of qualifying equipment (five-year MACRS property) into service and has a 32% marginal federal tax rate.

Before OBBBA (2025 phase-down schedule, bonus depreciation at 40%):

After OBBBA (100% bonus depreciation restored):

The total deduction over the life of the asset is the same either way — $100,000. What changes is timing: under 100% bonus depreciation, the entire $32,000 in illustrative tax savings is pulled into year one instead of being spread across several years. That acceleration can meaningfully improve near-term cash flow for a growing business, but it also means less depreciation is available to offset income in future years.

The Qualified Business Income (QBI) Deduction Made Permanent

The Section 199A QBI deduction — up to 20% of qualified business income from a sole proprietorship, partnership, S corporation, or certain trusts — was scheduled to expire after 2025 under the TCJA. OBBBA made the deduction permanent 3, and industry summaries note adjustments to phase-in ranges and thresholds affecting specified service trades or businesses (SSTBs) such as consulting, law, and healthcare practices 3.

The underlying mechanics that made QBI complicated before OBBBA are still in place:

• Above certain income thresholds, the deduction can be limited by W-2 wages paid by the business and the unadjusted basis of its qualified property.
• SSTBs above the income thresholds may see the deduction phased out entirely.
• The deduction is calculated at the individual level on a pass-through owner's return, not at the entity level.

Because the permanence of QBI removes the "expiring provision" planning question, it may be worth revisiting entity structure (S corp vs. sole proprietorship vs. partnership) now that the deduction is a durable part of long-term planning rather than a temporary benefit. Our tax strategies for business owners guide walks through entity-level considerations in more depth.

The Business Interest Expense Limitation (Section 163(j))

Section 163(j) limits the deduction for net business interest expense, generally to 30% of adjusted taxable income plus business interest income. From 2022 through 2024, "adjusted taxable income" was computed on an EBIT basis (after subtracting depreciation and amortization), which produced a tighter limitation for capital-intensive and leveraged businesses. OBBBA permanently restored the more generous EBITDA-based computation for tax years beginning after December 31, 2024, meaning depreciation and amortization are added back before applying the 30% cap 7 8.

This matters most for businesses that carry meaningful debt — real estate operating companies, franchise groups, and equipment-heavy businesses among them. The IRS issued FAQs in Fact Sheet 2025-9 to help taxpayers apply the amended rules, noting the changes phase in based on tax years beginning after December 31, 2024 and December 31, 2025 for certain provisions 9, so the exact interaction with your fiscal year should be confirmed with a preparer.

Domestic Research and Development Expensing Returns

Before OBBBA, the TCJA required businesses to capitalize and amortize domestic research and experimental (R&E) expenditures over five years (fifteen years for foreign research), starting in 2022 — a change that significantly hurt cash flow for software, product-development, and engineering-driven businesses. OBBBA created new Section 174A, generally allowing full, immediate expensing of domestic R&E costs for tax years beginning after December 31, 2024 10 11.

Points worth flagging:

• Foreign research is treated differently and generally still requires longer amortization, so businesses with offshore development teams need to separate domestic and foreign costs carefully.
• Small businesses may have retroactive options, including the ability to amend certain prior-year returns to accelerate previously capitalized domestic R&E costs — the specifics depend on your entity's gross receipts history and prior elections, an area still being refined through IRS guidance 12.
• Interaction with Section 163(j) should be modeled together, since accelerating deductions changes adjusted taxable income calculations in the same year.

Opportunity Zones: A Permanent, but Changing, Program

The Qualified Opportunity Zone (QOZ) program, created by the original TCJA, was scheduled to sunset after December 31, 2026. OBBBA made the program permanent and restructured it going forward, with a new framework — sometimes called "OZ 2.0" — taking effect January 1, 2027, featuring a rolling deferral mechanism, updated zone designations, and enhanced incentives for rural Qualified Opportunity Funds 13 14 15.

Because the transition to the new framework happens at the start of 2027, business owners and investors currently considering a QOZ investment should discuss with their CPA whether it makes more sense to invest under the current rules or wait for the new designations and rolling-deferral mechanics to take effect. This is an area where the practical, on-the-ground guidance is still catching up to the statute.

Who May Benefit Most?

Not every business fits neatly into one category, and many of these provisions interact — for example, accelerating both bonus depreciation and R&D expensing in the same year can change your 163(j) calculation. This is exactly the kind of multi-provision interaction a CPA should model before you act.

Actions to Discuss With Your CPA Before Year-End

• [ ] Confirm the placed-in-service date for any recent or planned equipment purchases, since it determines whether the old phase-down or new 100% bonus rate applies.
• [ ] Compare Section 179 vs. bonus depreciation for planned purchases — 179 can be used selectively to manage taxable income, while bonus has no dollar cap.
• [ ] Recalculate your QBI deduction under the permanent rules, especially if your business is an SSTB near the phase-out thresholds.
• [ ] Review whether your domestic R&D costs qualify for immediate expensing under new Section 174A, and ask whether amending a prior return makes sense.
• [ ] Model your business interest expense limitation under the restored EBITDA-based 163(j) computation if your business carries debt.
• [ ] If you are considering an Opportunity Zone investment, discuss whether to invest now or wait for the 2027 framework.
• [ ] Ask how these federal changes interact with your state's tax conformity rules, since not every state automatically adopts federal depreciation or expensing changes.
• [ ] Revisit your entity structure in light of QBI's permanence and the interest expense limitation changes.

Because several OBBBA provisions are still receiving implementation guidance from Treasury and the IRS, and because states do not uniformly conform to federal changes, year-end planning conversations with a CPA are especially important this cycle. If you want to model different scenarios yourself first, LocateMyWealth's Tax Strategy Planner and Net Worth Dashboard can help you organize the numbers before that conversation — and our broader guide to business owner tax strategies covers additional entity- and retirement-plan-level ideas that pair well with these provisions. Real estate investors specifically should also see our companion piece on how real estate investors can use the One Big Beautiful Bill.

None of the provisions above are automatic windfalls — they are timing tools and structural options whose value depends heavily on your income level, entity type, and state of operation.