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December 15, 2025
As 2025 draws to a close, business owners across the country are evaluating how the One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, will impact their planning for the years ahead.
The OBBBA represents the most significant update to federal tax law since the 2017 Tax Cuts and Jobs Act.
It introduces several provisions designed to strengthen business investment, support long-term growth and simplify certain aspects of tax compliance.
Though many of the headlines surrounding the bill have focused on its size and political back-and-forth, the practical implications for small businesses, closely held companies and family-owned enterprises are substantial.
The OBBBA provides a compelling reason to revisit planning strategies, ranging from entity structure and capital acquisition to succession planning and potential exit timing.
With stability returning to the tax landscape, business owners now have a clearer long-term framework within which to operate.
Three key aspects of OBBBA are poised to have the greatest impact on businesses.
Expanded opportunities for wealth transfer
One of the most consequential changes under OBBBA is the permanent increase in the federal gift and estate tax exclusion.
As of 2025, individuals may transfer up to $13.99 million ($27.98 million for married couples) during life or at death without incurring federal gift or estate tax.
Beginning Jan. 1, 2026, these exclusion amounts increase to $15 million ($30 million for couples), with inflation adjustments thereafter.
These historically high thresholds create an unusually strong planning environment for business owners who want to shift wealth to the next generation while preserving family control.
The larger exemption amount is especially significant for owners of closely held businesses.
Transferring minority or non-voting interests, either outright or through trusts, can reduce estate tax exposure, while allowing the senior generation to retain operational control.
These transfers may also qualify for valuation discounts based on lack of marketability or lack of control, which increases the effective value of each gifted dollar.
Many owners use these tools to shift future appreciation out of their taxable estate, keeping long-term growth inside family trusts that can endure for multiple generations.
OBBBA’s permanent exclusion also encourages a more intentional approach to structuring intra-family sales and refinancing arrangements.
Grantor trusts, installment sales, family LLCs and recapitalizations can all be coordinated to reduce future estate tax, smooth business succession and prepare younger family members for ownership roles.
For families with children active in the business, it may make sense to align ownership transfers with management transitions.
For families with children who are not active in the business, owners may use trusts or life insurance to equalize inheritances while keeping the business intact for those who continue to operate it.
Full expensing reinstated for capital investments
The ability to immediately deduct the full cost of qualifying capital purchases is once again available to business owners.
The One Big Beautiful Bill Act restores 100% bonus depreciation for qualified property placed in service on or after Jan. 20, 2025.
Under previous law, the deduction began tapering down after 2022, which left many owners facing smaller and smaller first-year write-offs.
The new law eliminates the phaseout and brings back full expensing as a permanent feature of the tax code.
Bonus depreciation applies to a wide range of assets, including machinery, equipment, vehicles that meet IRS guidelines, computers, furniture and certain improvements to nonresidential real estate.
The reinstatement is a meaningful development for companies that rely on steady reinvestment in productive assets – whether they are modernizing a shop floor, upgrading a fleet or expanding operational capacity.
The law also widens the scope of eligible property.
Certain improvements used in manufacturing or production activities within commercial buildings may now qualify, which could benefit businesses that operate specialized facilities. Owners can also coordinate bonus depreciation with Section 179 expensing.
Though Section 179 is subject to dollar limits and phaseouts for larger purchases, bonus depreciation is not.
Together, these provisions give business owners considerable flexibility when structuring equipment purchases or facility upgrades.
OBBBA strengthens several provisions intended to improve cash flow and motivate reinvestment back into businesses.
Changes to research and development expensing
The One Big Beautiful Bill Act also delivers significant relief for companies that invest in research, product development and process improvements.
Beginning Jan. 1, 2025, domestic research and development expenditures can once again be deducted in the year they are incurred.
This change reverses the rule that took effect in 2022, which required businesses to capitalize and amortize R&D costs over five years.
For many companies in technology, manufacturing, health care and engineering, the amortization requirement created cash flow pressure and discouraged timely investment in innovation.
Under the restored rules, qualifying R&D costs include wages paid to employees conducting research, supplies used in experimentation and amounts paid to certain third-party contractors involved in eligible development work.
Companies that build prototypes, refine production methods or test new product concepts often incur these types of expenses.
Immediate deductibility allows businesses to recover their investment sooner and can substantially reduce tax liability in years of heavy development spending.
A potential additional benefit is the opportunity to revisit prior tax years.
Depending on IRS guidance and individual circumstances, some businesses may be able to amend earlier returns to claim deductions they were previously required to amortize.
Owners should consult with tax advisors to determine whether amended filings are appropriate and beneficial.
Turning policy into opportunity
The tax changes embedded in the OBBBA are meant to encourage investment, ownership transition and innovation across the economy.
For individual business owners, the path forward will look different depending on size, structure and long-term plans, but the message is the same.
With thoughtful planning and timely action, these reforms can strengthen a company’s financial foundation and create lasting value for owners, employees and families.
