The One, Big, Beautiful Bill Act: Proposed Federal Business Tax Breaks
Posted by Cory Van Deusen V on June 09, 2025
Please note that the articles dated June 2025 reflect proposed tax legislation as it stood at the time of publication.
A bill in Congress, known as The One, Big, Beautiful Bill, aims to significantly reshape several federal business tax breaks. The proposed legislation is still under debate but has already garnered attention across business communities.
Key Tax Provisions and Proposed Changes
1. Bonus Depreciation
- Current Rules: Businesses can deduct 40% of the cost of eligible new and used equipment in the year it’s placed in service. This will drop to 20% in 2026 and phase out entirely by 2027.
- Proposed Change: The bill would restore 100% bonus depreciation retroactively for property acquired after January 19, 2025, and extend it through 2029.
- Why It Matters: A full deduction in the year of purchase allows for faster depreciation, freeing up cash flow, which is especially beneficial for capital-intensive industries.
2. Section 179 Expensing
- Current Rules: Businesses can expense up to $1.25 million of qualified asset purchases in 2025, with a phaseout beginning at $3.13 million.
- Proposed Change: The bill would increase the expense limit to $2.5 million and the phaseout threshold to $4 million for property placed into service after 2024, with amounts adjusted annually for inflation.
- Why It Matters: This provision could help smaller businesses deduct more of the cost of qualifying purchases without dealing with depreciation schedules, offering more flexibility for expanding operations.
3. Qualified Business Income (QBI) Deduction
- Current Rules: The QBI deduction, created by the Tax Cuts and Jobs Act (TCJA), is available through 2025 to owners of pass-through entities like S corporations, partnerships, LLCs, sole proprietors, and most self-employed individuals.
- Proposed Change: The bill would make the QBI tax break permanent and increase the deduction amount to 23% for tax years beginning after 2025.
- Why It Matters: The increased deduction rate and permanent extension would lead to substantial tax savings for eligible pass-through entities, enabling more effective long-term tax planning.
4. Research and Experimental (R&E) Expensing
- Current Rules: Businesses must capitalize and amortize domestic R&E costs over five years (15 years for foreign research) under the TCJA.
- Proposed Change: The bill would reinstate a deduction for R&E costs incurred after 2024 and before 2030, allowing taxpayers to elect whether to deduct or amortize the expenditures.
- Why It Matters: Restoring current expensing could ease tax burdens and encourage innovation, particularly for startups and tech firms.
5. Increase in Information Reporting Amounts
- Current Rules: Businesses must send Form 1099-NEC to contractors they pay more than $600 by January 31 of the following year.
- Proposed Change: The bill would increase the threshold to $2,000 in payments during the year and adjust it for inflation.
- Why It Matters: This proposal would reduce administrative burdens on businesses, with fewer 1099-NECs needing to be prepared and filed.
Additional Proposals
The bill also proposes changes to the business interest expense deduction and some employee benefits, including eliminating federal income tax on eligible tips and overtime. If enacted, the bill could deliver immediate and long-term tax relief to certain business owners.
Current Status
The bill narrowly passed in the U.S. House of Representatives and is currently being considered in the Senate. Changes are likely to be made there, and the new version would have to be passed again by the House before being sent to the President to be signed into law. Business owners are advised to seek professional guidance due to the complexity and potential retroactive provisions of the bill.
Please note that the tax law discussed in this article is currently proposed and has not yet been enacted.
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Cory has over 20 years of experience providing tax and consulting services to commercial businesses and individuals. His expertise lies in the myriad of business development incentives offered by various federal, state, and local agencies to targeted industries such as Manufacturing, Software Development, Technology Companies and many other in order to encourage regional investment, spur job creation, and foster economic growth. The available incentives include refundable tax credits, tax abatements, grants, and forgivable loans. He has extensive knowledge of Start-Up NY, Opportunity Zones, the Excelsior Jobs Program, Qualified Emerging Technology Companies, and various local incentives such as Industrial Development Agency (IDA) benefits. Additionally, he spends his time providing services to Start-Up Companies ranging from a founder with an idea to multi-national tech companies that have raised hundreds of millions of dollars. Cory has experience in all areas of U.S. federal and NY State taxation. He has been with Lumsden McCormick since 2001, was named partner on January 1, 2015. He is a member of the Firm’s Executive Committee and is head of the commercial services group.