The One Big Beautiful Bill Act (OBBBA) brings long-awaited good news for business owners: several key provisions from the Tax Cuts and Jobs Act (TCJA) are not only back—they’re back for good.
Gone are the days of guessing whether bonus depreciation or the QBI deduction would be renewed. The OBBBA makes them permanent, offering long-term tax certainty and opening the door for more strategic planning and aggressive reinvestment.
What Changed: Key TCJA Business Provisions Are Back and Permanent
Here’s what’s in the final bill:
- 100% Bonus Depreciation is permanently reinstated. Businesses can now fully expense the cost of eligible capital assets—like equipment, vehicles, and software—in the year they’re placed in service.
- Section 179 Expensing Cap Raised to $2.5 Million. The popular expensing limit now includes qualified real property such as HVAC, roofs, and security systems for commercial buildings.
- The 20% QBI Deduction is Here to Stay. Section 199A is now permanent for eligible pass-through entities, giving small businesses and entrepreneurs ongoing relief on business income.
What This Means for You
1. Accelerate Capital Investments
With 100% bonus depreciation and expanded Section 179 limits now permanent, you can confidently invest in:
- Machinery and equipment
- Work vehicles
- Computers and off-the-shelf software
- Leasehold improvements and other qualified real property
Action Step: Consider moving up your capital improvement timeline. Meet with your LSL advisor to model the impact of full expensing on your 2025 and 2026 tax bills.
2. Structure Your Business for QBI Eligibility
The QBI deduction—worth up to 20% of qualified income—is now a permanent fixture for pass-through entities. But it comes with limitations and thresholds based on income levels, wages paid, and your business type.
Action Step: Review your current business structure. If you’re on the fence between staying a sole proprietor or electing S-corp status, this is the time to evaluate what gets you the biggest benefit.
3. Plan Ahead with Confidence
Temporary tax provisions create uncertainty, making it harder to budget, invest, or grow. With these breaks now permanent, you can plan long-term with more confidence.
Not sure how these tax changes could impact your business? Here are a few real-world scenarios that show how companies are taking advantage of the OBBBA’s permanent provisions:
- Upgrading Equipment: A fabrication shop replaces outdated machinery with newer, more efficient models. With 100% bonus depreciation now permanent, they deduct the full purchase amount in the year placed in service—boosting cash flow and reducing their taxable income.
- Renovating Commercial Space: A business invests in HVAC, roof upgrades, and a new security system. These improvements now qualify for Section 179 expensing, allowing them to be deducted immediately instead of depreciated over decades.
- Expanding a Vehicle Fleet: A delivery service expands operations with a new fleet of trucks. With permanent bonus depreciation, they write off the full cost of each vehicle in the year of purchase, fueling growth and minimizing their current-year tax bill.
- Investing in Tech: A professional services firm upgrades laptops, cloud software, and servers. With the right mix of bonus depreciation and Section 179, they fully expense these purchases to lower taxable income while increasing efficiency.
- Restructuring for QBI Savings: A sole proprietor shifts to an S-Corp structure to qualify for the 20% Qualified Business Income deduction. With permanent QBI in place, they reduce their total tax burden—year after year.
Why It Matters
These aren’t just tax perks—they’re strategic tools that help you:
- Boost cash flow
- Accelerate growth
- Improve ROI on capital expenditures
- Reduce uncertainty in multi-year planning
And now, thanks to the OBBBA, you no longer have to wait on Congress for last-minute renewals.
Final Thoughts
The return of these business-friendly provisions—this time permanently—signals a new era of tax certainty and planning flexibility. But the key to maximizing them lies in proactive, strategic decision-making. Let’s make a plan.
LSL can help you determine where to invest, how to structure, and how to put these permanent tax benefits to work for your business Contact us today!
