Missed the Fireworks? The One Big Beautiful Bill Changes the Tax Game

While most of us were figuring out how to keep sparklers from burning holes in patio furniture, lawmakers quietly passed a massive tax bill over the July 4th holiday weekend.

It's called the One Big Beautiful Bill. The name sounds like something crafted in a branding meeting, but the contents are worth paying attention to — especially if you’re a business owner, developer, or real estate investor with big plans for the back half of the year.

This isn’t just another round of minor updates. The bill revives popular deductions, reopens doors for certain strategies, and adds a few short-term incentives that could be gone again before you blink.

Here’s what’s in it — and what it means for your next move.

1. Full Bonus Depreciation Is Back

Assets placed in service after January 19, 2025, can once again be written off completely in year one. This applies to improvements, machinery, and a range of business property.

If you’ve been deferring a project or equipment investment because the tax math didn’t pencil out — it might now.

Why it matters:
Beyond reducing taxes up front, this also brings cost segregation back into focus. A cost segregation study breaks your property into components like flooring, lighting, and land improvements — and many of those qualify for bonus depreciation. That means immediate, front-loaded deductions and significant cash savings in year one.

It’s not just about the write-off — it’s about freeing up capital to reinvest, offsetting other income, and improving your return on investment faster. If you're not using this combo, you’re likely leaving serious money on the table.

2. R&D Expensing Gets Reinstated (Retroactively)

If your business is doing any kind of product development, manufacturing, or software innovation — and more businesses qualify than you might think — this one’s big. Domestic R&D costs are now fully deductible in the year they’re incurred — retroactive to December 31, 2024 — rather than spread out over five years.

Remember, the R&D credit isn’t just for labs and tech giants. If your team is solving technical problems, improving processes, testing prototypes, or developing new products (even if they don’t work), you may qualify. That includes manufacturers, contractors, software developers, engineers, and even food and beverage companies tweaking recipes or packaging.

Why it matters:
Immediate expensing means more cash, sooner — and more flexibility to reinvest in what’s next.

3. Yes, You Can Now Take the R&D Credit and the Deduction

Under the new law, businesses can claim the R&D tax credit and deduct the same expenses under Section 174A. Previously, it was one or the other.

If you’re a small business (under $5M in gross receipts), you can also use the credit to offset payroll taxes.

Why it matters:
This unlocks real savings and real cash — not just theoretical tax advantages.

4. Opportunity Zones Get Stability

No more waiting to see if the Opportunity Zone program will be renewed. It’s now permanent.

The bill also adds a new category — Qualified Rural Opportunity Funds — aimed at encouraging more investment in underserved areas.

But: with permanence comes oversight. Reporting requirements are increasing.

If you're investing:
There’s now a long-term runway to plan with confidence — just be ready for a compliance lift.

5. Energy Incentives Are Still on the Table — For Now

• 179D deductions (up to $5/sq ft) for energy-efficient upgrades in commercial buildings remain through 2026.
• 45L credits ($2,500–$5,000 per unit) for energy-efficient residential construction are also extended through 2026.

Your move:
If energy-efficient design is part of your pipeline, now’s the time to accelerate. These incentives have a very clear end date.

6. Section 179 Expensing Limit Increases

You can now deduct up to $2.5 million in qualifying purchases (with phaseout beginning at $4 million). This is retroactive to the end of 2024 and will be indexed for inflation.

Why it matters:
This is especially helpful for businesses that invest in equipment, vehicles, or leasehold improvements — and want the benefit in the current year.

7. Other Key Highlights

• The 20% deduction for pass-through income (Section 199A) is now permanent.
• Low-Income Housing Tax Credit and New Markets Tax Credit are also locked in permanently.
• Adjustments to the SALT cap and Child Tax Credit are in place — more relevant to your personal return than your business strategy.

What Should I Do Now?

Some provisions are already in effect. Others kick in next year. And several — especially the energy incentives — have an expiration date that’s coming fast.

Here’s your checklist:

• If you’ve placed qualifying assets in service after January 19, 2025 — congrats, you get the tax break. But also revisit your depreciation strategy: 100% bonus is back.
• Accelerate any energy-efficient builds or upgrades — the 2026 cutoff for 179D and 45L is closer than it feels.
• Revisit your R&D strategy to ensure you’re capturing both the immediate deduction and the credit.
• Reengage with Opportunity Zones now that they’re permanent — but prepare for increased reporting requirements.
• Don’t assume your 2024 return is a done deal — some provisions are retroactive and worth a second look.

Founders, early employees, and angel investors, rejoice: the 100% capital gains exclusion for QSBS under Section 1202 is still alive and well. 

Earlier versions of the bill considered capping or eliminating this benefit for high earners. That didn’t make the final cut. The QSBS exclusion’s value increased substantially with the passage of this bill and gained flexibility. 

Why it matters: 

• This remains one of the most powerful tax planning tools for startup founders, early-stage investors, and closely held C corps. 
• Increased per-issuer gain exclusion from $10 Million to $15 Million 
• Phase-in holding period compared to the original 5-year floor: 

• • Holding period of 3 years qualifies for 50% exclusion 
  • Holding Period of 4 years qualifies for 75% exclusion 
  • Holding period of 5+ years qualifies for 100% exclusion 
     

If you're thinking about selling your company or transferring shares in the next few years, this provision could save you millions — but only if you meet the criteria. Here’s what qualifies. 

9. No Federal Income Tax on Tips or Overtime (Through 2028)

This one’s aimed at hourly employees — but if you run a business with tipped or overtime-eligible workers, you’ll want to pay attention.

Here’s what’s changing:

• Tips are no longer subject to federal income tax (up to $25,000 per employee per year)
• Overtime premiums are also tax-exempt (up to $12,500 per employee per year)
• This runs through the end of 2028

Why it matters for business owners:

At first glance, it looks like a win for workers — and it is — but it comes with a few ripple effects for you:

• Bigger take-home pay without you spending more — which can help with retention and recruiting
• Overtime may become more attractive than hiring — if employees are keeping more of what they earn, you might lean into overtime instead of adding headcount
• Tip reporting could shift — with no federal income tax owed, employees may be more likely to report tips accurately (good for compliance, possibly not for FICA)
• Payroll just got trickier — federal income tax is off the table, but FICA and Medicare still apply. And here’s where it gets interesting: North Carolina is looking at creating a similar exemption at the state level, and South Carolina might follow. If either state passes its own version — with its own caps or timelines — you’ll have to adjust again. That means rethinking how you calculate paychecks, update your payroll system, and explain all of it to your team.

• And don’t forget — this whole thing sunsets after 2028

So no, you don’t get the tax break directly. But your payroll process, your staffing strategy, and your ability to communicate clearly with employees? All on the line.

The Bottom Line

If your eyes glazed over halfway through this article and you skipped here to the bottom, you’re not alone. Most business owners don’t get a kick out of decoding Washington’s latest. But this legislation changes the game.

Some incentives are back. Some are brand new. And a few have ticking clocks attached. The real risk isn’t making the wrong move — it’s missing your window because you didn’t realize it opened.

That’s where we come in. (We actually do get a kick out of decoding Washington’s latest.)

We’re tracking the deadlines, the phase-outs, and the fine print — but timing matters. If you wait too long, the savings may be gone.

Let’s figure out what applies to you and put a plan into motion.