A major new tax law, the “One Big Beautiful Bill Act” (OBBBA), was signed on July 4, 2025, and it’s set to change how your business manages its finances, investments, and payroll. Understanding what these changes mean for your bottom line is crucial.
At Shah Tax & Accounting Services LLC, our job is to stay ahead of the curve for you. Because this law is brand new, tax professionals are still analyzing the details. As the IRS releases more clarification, specifics may evolve, and we are monitoring every development to provide you with the most current guidance.
This post is the first in our new series for business owners designed to break down the OBBBA. Think of this as your high-level briefing. In the coming weeks, we will post a deep dive into each of these topics, giving you the in-depth knowledge you need.
Here are the most significant changes that will have the biggest immediate impact on your business.
1. Major Changes to Payroll and Employee Benefits
What it means for you: The new law creates a two-sided coin for payroll. On one side, there’s a new compliance burden: you must now separately track and report employee tip and overtime income related to their new deductions. On the other side, there are major new incentives. The tax credits for providing Paid Family and Medical Leave (PFML) and employer-provided child care have been made permanent and significantly expanded, making it more affordable to offer these valuable benefits.
Key Takeaway: Payroll has become more complex, but also more strategic. You must update your systems to handle the new reporting, while also evaluating how these enhanced credits can be used to attract and retain top talent.
2. A Green Light for Investment: Supercharged Write-Offs
What it means for you: The law makes several popular business deductions permanent and more generous. 100% bonus depreciation is here to stay, as is the immediate write-off for domestic R&D costs. The law also adds a new, targeted incentive allowing businesses to immediately expense up to $150,000 in qualified U.S. sound recording production costs.
Key Takeaway: This is a clear signal from the government to invest in your own growth. Whether you’re buying equipment, developing new technology, or producing creative content, the tax code is now set up to provide an immediate financial benefit.
3. Big News for Pass-Throughs and Partnerships
What it means for you: The Qualified Business Income (QBI) Deduction—a critical tax break for S-corps, sole proprietorships, and partnerships—is now permanent and has been enhanced to benefit more small business owners. Additionally, the rules governing payments from a partnership to a partner for property or services have been clarified in the law, reducing uncertainty for complex transactions.
Key Takeaway: These changes provide long-term certainty and tax savings for the millions of American businesses structured as pass-throughs. The stability of the QBI deduction is a cornerstone of modern tax planning.
4. Easing of Key Business Limitations and Reporting
What it means for you: The OBBBA provides welcome relief in a few key areas. The limitation on deducting business interest has been permanently relaxed, allowing many businesses to write off more of their financing costs. The law also reverses the planned 1099-K changes and raises the 1099-NEC/MISC reporting threshold to $2,000, reducing the administrative burden for businesses that rely on contractors.
Key Takeaway: These changes reduce compliance headaches and can directly lower your tax liability. It’s an ideal time to review your financing structures and contractor payment policies to maximize these benefits.
Key Takeaways for Your Business: A Snapshot
Here’s a quick summary of the key changes and what you should be thinking about right now:
- Payroll & Benefits: The law creates new employee deductions (for tips/overtime) that require you to update payroll reporting systems immediately. Conversely, it significantly enhances tax credits for offering Paid Family Leave and Child Care, creating a new strategic opportunity to attract talent.
- Business Investment: With 100% bonus depreciation and the QBI deduction now permanent, and R&D expensing restored, long-term planning for capital investments is more stable and tax-advantaged than ever.
- Pass-Through Businesses: The permanent and enhanced QBI deduction provides certainty and continued tax savings for a huge number of businesses. The clarification of partnership payment rules also reduces ambiguity.
- Administrative Relief: Relaxed rules for deducting business interest and higher 1099 reporting thresholds mean less red tape and potentially lower tax bills.
- Industry-Specific Changes: Targeted relief for industries like residential construction and sound recording, plus a major overhaul of international tax rules, mean businesses in these sectors must conduct a detailed review of their tax strategies.
Don’t Wait to Plan for These Changes
The OBBBA is complex, and new guidance is still being released. Trying to navigate it alone could mean missing out on major savings or making a costly mistake.
This is where Shah Tax & Accounting Services LLC can provide immediate value. We translate these new laws into a clear, actionable strategy tailored to your specific business situation, whether you’re down the street or across the country. Contact us today for a consultation to get ahead of the curve and ensure you are positioned for success in this new tax environment.
Contact Shah Tax & Accounting Services LLC Today! Give us a call at (732) 796-4005 or email us at info@shahaccounting.com.
Disclaimer: This information is for general informational purposes only and not intended as tax, legal, or accounting advice. Tax laws are complex and subject to change. Please consult a qualified professional for advice tailored to your specific situation.
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