The One Big Beautiful Bill Act (H.R. 1) became law on July 4, 2025, and it includes several potential tax breaks for small business owners. Here are 5 key points you should know about — in plain English.
1. You Can Write Off Big Purchases Right Away
What’s new:
If you buy something big for your business — like equipment, furniture, signs, or tech — you can now deduct the entire cost in the year you buy it (starting in 2025).
Why this matters:
Instead of spreading your deductions over multiple years through depreciation, you get all the tax savings upfront.
Examples:
- Restaurant equipment
- A business vehicle
- Renovating your office
- New equipment for your restaurant
- Computers or a new POS system
Even used items qualify!
2. You Keep a 20% Tax Break on Your Profits
What’s new:
The law makes permanent the 20% Qualified Business Income (QBI) deduction for pass-through businesses like LLCs, S corporations, and sole proprietorships.
What this really means:
- Say your business made $100,000 in profit.
- You could deduct $20,000 — so you’d only be taxed on $80,000.
Why this matters:
- This deduction was going to go away — this bill makes it permanent.
- Even better: If you have more than one business (like a separate one for real estate, supplies, or branding), you may be able to use the deduction more than once to maximize these deductions (subject to IRS limits).
3. You Can Also Deduct Smaller Purchases More Easily
What’s new:
There’s another rule (called Section 179) that lets you write off smaller purchases right away, instead of depreciating them over time. This is separate from the bonus depreciation rule above.
New limits:
- The maximum deduction has gone up to $1.29 million with phase-out beginning at $3.2 million in purchases. These thresholds will now adjust for inflation each year.
- You can use it for equipment, software, business vehicles, and more.
Why this matters:
- It’s perfect for smaller, everyday business investments that don’t fall under the bigger 100% bonus depreciation rule.
- It’s helpful for smaller companies with lower annual spending.
4. Charitable Giving Just Got Easier
What’s new:
Even if you don’t itemize deductions on your taxes, you can still deduct charitable donations.
Why this matters:
- Supporting a nonprofit, school, or local cause? You can get a tax break for it.
- It also encourages your customers or employees to give more too — especially if your business is involved in the cause.
5. Bigger Child Tax Credit = Happier Employees
What’s new:
The child tax credit has increased to $2,200 per child, and more of it is refundable — meaning families will get more back, even if they owe little or no tax.
Why this matters:
- Many frontline workers will take home more money.
- That might help your business with employee retention or morale.
- You could even consider offering bonuses or childcare help to align with this new benefit.
Bottom Line
The act does contain some actionable items that may apply to your business. Since the law is now in effect, it’s a great time to meet with your accountant and solidify your plans.
This summary is for informational purposes only and does not constitute legal or tax advice. While H.R. 1 is now law as of July 4, 2025, certain provisions may require IRS guidance or clarification before implementation. Please consult your CPA to understand how these changes apply to your specific business.
