A New Tax Playbook: Unpacking the Landmark ‘One Big Beautiful Bill Act’

7/17/2025

As a business owner, you’re accustomed to the ground shifting beneath your feet. But a full legislative earthquake has hit – the newly enacted H.R. 1—also known as the “One Big Beautiful Bill Act”. This is not a minor adjustment. It’s a major overhaul of the tax code that makes many temporary provisions permanent, enhances popular deductions, and introduces entirely new concepts for saving and investing.

Our firm has been meticulously dissecting the official text of this law to translate it from dense legal language into a clear, actionable playbook for you. The scope is massive, covering everything from how you write off equipment to how you save for your children’s future. For the business owner who acts decisively, this law is a declaration of opportunity.

The most critical H.R. 1 tax provisions

For years, the ability to immediately deduct the cost of business assets has been a critical tool for managing cash flow and fueling growth. H.R. 1 brings this tool back to its full power and makes it permanent.

• 100% Bonus Depreciation: The previous law was phasing out this powerful provision. H.R. 1 reverses course completely. 
  • For property acquired after January 19, 2025, you can once again deduct 100% of the cost of qualified business property in the year it’s placed in service. 
  • This provision is now permanent, ending the uncertainty of year-to-year phase-downs. Think of it as the difference between paying for a new delivery truck in full, upfront, versus making small payments on it for seven years.  
  • It also makes real estate cost segregation strategies much more valuable, as assets with shorter useful lives (think HVAC, carpeting, etc) can be fully expensed in year 1.  This is a massive, immediate tax savings. 
• Increased Section 179 Expensing: This provision, often used for smaller-scale purchases, also gets a major boost. 
  • For tax years beginning after December 31, 2024, the maximum amount you can expense increases to $2,500,000, with the investment phase-out threshold rising to $4,000,000.

2. Main Street Relief: A Permanent, More Powerful QBID

The 20% Qualified Business Income Deduction (QBID) is a cornerstone of tax planning for pass-through entities (S-corps, partnerships, sole proprietorships). H.R. 1 makes this deduction permanent by removing the prior 2025 sunset, and enhances it in key ways.

• Expanded Access for Service Businesses: The income limitations for Specified Service Trades or Businesses (SSTBs) have been increased. The phase-in range now begins at $75,000 for single filers and $150,000 for joint filers, allowing more professionals like consultants, doctors, and lawyers to claim the full deduction.
• A New Minimum Deduction: The law introduces a minimum QBID of $400 for any taxpayer with at least $1,000 of active qualified business income, ensuring even the smallest ventures see a benefit.

3. A Reprieve for E-Commerce and Contractors: The 1099-K Threshold is Repealed

One of the most significant administrative headaches of recent years has been addressed.

• 1099-K De Minimis Restored: The law completely repeals the change that lowered the reporting threshold for third-party payment networks (like Stripe, PayPal, and Etsy) to $600. The law reinstates the original, higher threshold: reporting is only required if a payee has more than 200 transactions and more than $20,000 in payments in a year. This change is retroactive, as if the lower threshold had never been enacted.
• 1099-NEC/MISC Threshold Increased: For payments to independent contractors and other service providers, the reporting threshold is increased from $600 to $2,000 per year for payments made after December 31, 2025.

4. SALT Cap Relief for Business Owners in High-Tax States

The $10,000 State and Local Tax (SALT) deduction cap has been a significant pain point. H.R. 1 provides substantial, albeit temporary, relief.

• A Higher, Phased Cap: The cap is replaced with an “applicable limitation amount.” For 2025, this amount is $40,000. It then phases down slightly through 2029 before reverting to $10,000.
• Income Limitation: This relief is targeted. The higher cap is phased down for taxpayers with modified adjusted gross income over $500,000.  
• Pass-Through Entity Tax (PTET) left intact:  State level workarounds on the original SALT cap, which allow business owners to pay their state and local taxes through their businesses, were left untouched.  Business owners can continue to enjoy lower federal tax burdens as a result.

5. Supercharged Child Care Credits and New Savings Vehicles

• Employer-Provided Child Care Credit: This powerful, dollar-for-dollar credit is enhanced significantly. The credit rate increases from 25% to 40% of qualified expenditures (and 50% for eligible small businesses). The annual cap per business is raised to $500,000 ($600,000 for small businesses). This makes offering child care benefits a much more attainable and financially attractive option for retaining top talent.
• "Trump Accounts": The law establishes a new type of savings vehicle for individuals under 18. For business owners, the key provision is the ability to establish an employer contribution program, allowing you to contribute up to $2,500 per year to an employee’s child’s account, with the contribution being excluded from the employee’s gross income.
• Opportunity Zones Made Permanent: The Opportunity Zone program is no longer temporary. The law establishes a permanent framework with decennial (10-year) designation periods. It modifies the deferral and basis step-up rules, increasing the basis of an investment by 10% after 5 years (or 30% for a rural fund) and providing a full step-up to fair market value on sale after 10 years.
• Estate Tax Exemption Increased: For family-owned businesses, this is monumental. The lifetime estate and gift tax exemption is permanently increased to $15,000,000 per person, adjusted for inflation from 2026 onwards.
• Broader Use of 529 and HSA Funds: The law expands the definition of qualified expenses for 529 plans to include costs for professional credentialing programs. For Health Savings Accounts (HSAs), it permanently allows high deductible insurance plans to cover telehealth with no deductible and permits Bronze and Catastrophic plans to be HSA-eligible.
• A Note on Office Snacks: While many had hoped for a broad clarification, H.R. 1 provides only a very narrow exception to the 50% meal deduction limit, specifically for meals provided on certain fishing vessels and at remote fish processing facilities. General office snacks remain subject to the existing complex rules.

This law is a paradigm shift.  The emphasis on permanence for many key business deductions allows for something all owners crave: certainty.   But trust me, you don’t want to spend your time sorting through it all.  Now is the time to re-evaluate your long-term capital investment plans, your entity structure, and your employee benefit offerings.

Sign up today for a FREE discovery call.

Greg Tobias, Enrolled Agent

Admitted to practice before the Internal Revenue Service

Sources: H.R. 1, 119th Congress, "An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14." (2025)

• 100% Bonus Depreciation: Sec. 70301
• Section 179 Expensing: Sec. 70306
• Qualified Business Income (QBID) Deduction: Sec. 70105
• 1099-K Reporting Threshold Repeal: Sec. 70432
• 1099-NEC/MISC Reporting Threshold Increase: Sec. 70433
• State and Local Tax (SALT) Deduction Cap: Sec. 70120
• Employer-Provided Child Care Credit: Sec. 70401
• "Trump Accounts": Sec. 70204
• Opportunity Zones: Sec. 70421
• Estate and Gift Tax Exemption: Sec. 70106
• 529 Plans: Sec. 70414
• Health Savings Accounts (HSAs): Sec. 71306 and Sec. 71307
• Office Snacks: Sec 70305