As we move into the 2026 tax year, a significant piece of tax legislation, the One Big Beautiful Bill Act (OBBBA), is reshaping the U.S. tax landscape for both individuals and businesses. Originally signed into law in 2025, the OBBBA includes sweeping changes to federal tax rules, many of which have major implications for business owners, from small enterprises to large corporations.

 

At HRSS CPAs, we want to help you understand what these changes mean in practical terms and how you can position your business to benefit from them.

What Is the One Big Beautiful Bill Act?

The OBBBA is a comprehensive tax reform law enacted in July 2025 that extends, expands, and makes permanent several provisions of the 2017 Tax Cuts and Jobs Act (TCJA) and introduces new tax rules. The OBBBA includes important business-oriented provisions involving deductions, credits, depreciation rules, and more.

5 Ways the New Tax Law Affects Businesses

1. Full Expensing of Business Investments (100% Bonus Depreciation)

The OBBBA permanently restores 100% bonus depreciation for qualified business property. This means that businesses can deduct the entire cost of eligible assets the same year they are purchased.

 

If your business buys equipment, machinery, vehicles, or other qualifying property, you can typically deduct the full purchase price immediately rather than spreading it out over several years.

2. A Permanent and Enhanced Section 199A (QBI) Deduction

OBBBA makes the 20% Qualified Business Income (QBI) deduction permanent for owners of pass-through entities (like S corporations, partnerships, and sole proprietorships). For 2026 and onwards, the law also includes higher thresholds and a minimum deduction provision that makes the benefit more accessible to small business owners.

 

Eligible business owners can generally deduct up to 20% of their business income before taxes, subject to certain limits based on income and type of business. For example, if your business generates $250,000 in taxable income in 2026 and you meet the eligibility criteria, you may be eligible to deduct up to $50,000 (20%) under the QBI rules. 

3. Expanded Deductions for Small Business Owners

OBBBA modifies the thresholds and phase-out rules that previously limited who qualifies for full business deductions. As a result, more small business owners may now benefit from available deductions related to ordinary business expenses.

 

Given these changes, solo entrepreneurs and smaller pass-through entities are less likely to lose valuable deductions as their income rises, providing additional tax relief and planning flexibility.

4. Changes in Depreciation and Cost Recovery Rules

Beyond bonus depreciation, the law adjusts how certain business property is expensed and may introduce new categories of property eligible for accelerated deductions. 

Businesses with major capital investments (such as real estate improvements or asset-intensive operations) should work with their tax advisors to determine the optimal depreciation and expensing strategies under the updated rules.

5. Prioritizing Compliance and Recordkeeping

Although many of the tax updates offer clear advantages, they also introduce added complexity in reporting and compliance requirements. This shift means that specific deductions and credits might now involve more rigorous filing rules or require additional documentation than in previous years. Furthermore, various exemptions and benefits that were once straightforward may now require more detailed tracking and updated internal business policies to remain eligible.

 

Good recordkeeping and proactive planning have become vital strategies for maximizing potential savings and preventing unexpected issues during the hectic tax season.

How HRSS CPAs Can Help

At HRSS CPAs, we help businesses of all sizes understand and navigate these evolving tax laws. From tax planning and compliance to maximizing deductions and reducing your overall tax burden, our experienced professionals are here to support your growth and financial success.

 

Whether you need help understanding how these tax changes affect your business, need to plan your capital investments for maximum tax benefit, or are wondering if you qualify for the updated QBI deduction, contact our team today.