The “One Big Beautiful Bill Act” (OBBBA) is widely heralded as benefitting certain individual taxpayers.

Alert: The new law also contains several significant tax breaks for businesses. Here’s a roundup of five favorable provisions.

1. Section 179 deductions. Under Section 179 of the tax code, a business may “expense” the cost of qualified property placed in service during the year up to an amount equal to the lesser of its taxable income or a specified threshold. The deduction is reduced for costs above a generous annual threshold. The limits have been increased several times and indexed for inflation. Prior to the OBBBA, the limit for 2025 was $1 million with a phase-out threshold of $2.5 million. The new law hikes the limits to $2.5 million and $4 million, respectively, effective in 2025. Tip: As before, these limits will be indexed for inflation.

2. Bonus depreciation. The Tax Cuts and Jobs Act (TCJA) doubled the first-year bonus depreciation percentage to 100% for qualified property placed in service during the year. But the deduction was being gradually phased out over a five-year period ending after 2026. The new law reinstates 100% first-year bonus depreciation for qualified property acquired and placed in service after January 19, 2025. Tip: Prior to the OBBBA, the allowable deduction percentage for 2025 was 40%.

3. Research and experimentation expenses. Under prior law, research and experimentation (R&E) expenses were currently deductible. However, the TCJA requires R&E expenses to be amortized over five years, beginning for amounts paid or incurred after 2021. The OBBBA restores the ability to take a current deduction for R&E expenses incurred after 2024. But a business can still elect to amortize the expenses. Even better: A small business with average annual receipts of $31 million or less in the previous three years can claim the deduction retroactive to 2022. Tip: The new changes for R&E expenses are permanent.

4. Qualified business income. The TCJA created a new deduction for qualified business income (QBI) received by passthrough entities or self-employed individuals. Under Section 199A, a taxpayer could deduct up to 20% of the QBI, subject to certain limitations and phase-out ranges, including special rules for any “specified service trade or business”. The deduction was scheduled to expire after 2025, but has been permanently extended by the new law. Tip: The OBBBA also includes technical modifications.

5. Qualified small business stock. Previously, an investor in qualified small business stock (QSBS) could exclude from tax 100% of the gain on stock sold after five years if certain requirements were met. The OBBBA modifies these rules in several ways. Notably, a taxpayer may realize a lower percentage of benefits after holding the stock for only three years instead of five. Tip: The QSBS changes are effective for stock acquired in tax years beginning after the new law’s date of enactment—July 4, 2025.