What Entrepreneurs and Small Businesses Need to Know On July 4, 2025, the One Big Beautiful Bill Act was signed...
September 16, 2025
On July 4, 2025, the One Big Beautiful Bill Act was signed into law, ushering in some of the most entrepreneur-friendly tax changes in years. For founders, small business owners, and investors, the Act delivers major incentives to cut taxes, boost cash flow, and encourage investment.
Tax Relief Through Expensing and Depreciation
The new law permanently restores 100 percent bonus depreciation, allowing businesses to write off the full cost of eligible assets such as machinery, vehicles, or equipment in the year they are purchased. That is a game-changer for companies looking to scale quickly.
The Section 179 deduction also received a big upgrade, increasing the maximum upfront write-off from $1 million to $2.5 million, with phase-outs starting at $4 million. Both provisions are indexed for inflation and apply to assets placed in service after December 31, 2024.
For entrepreneurs, that means faster tax savings and improved cash flow, which can be reinvested into growth.
A Stronger QBI Deduction for Pass-Throughs
Pass-through entities such as LLCs, S-Corps, and sole proprietorships will benefit from a permanent boost to the Qualified Business Income deduction. The deduction rises from 20 percent to 23 percent, while the income thresholds expand to $75,000 for individuals and $150,000 for joint filers.
This is a direct win for Main Street businesses, lowering effective tax rates and giving small enterprises more breathing room.
Relief for Research and Innovation
Startups and R&D-heavy businesses finally got a break. The Act restores the immediate deduction of domestic R&D expenses, permanently reversing the old rule requiring five-year amortization.
Smaller companies with average gross receipts under $31 million from 2019 through 2021 are even allowed to apply retroactive deductions for expenses from 2022 through 2024. That is particularly valuable for tech startups, manufacturers, and innovators who have been carrying those costs on their books.
Expanded QSBS Gains Exclusions
The Act makes Qualified Small Business Stock (QSBS) far more attractive to founders and investors. Gains from the sale of eligible stock are now excluded at different stages of ownership. Investors can exclude 50 percent of gains after three years, 75 percent after four years, and 100 percent after five years.
The per-issuer gain cap rises from $10 million to $15 million, while the corporate asset limit increases to $75 million. These changes encourage investment in startups and reward early exits.
Expanded QSBS Gains Exclusions
The Act makes Qualified Small Business Stock (QSBS) far more attractive to founders and investors. Gains from the sale of eligible stock are now excluded at different stages of ownership. Investors can exclude 50 percent of gains after three years, 75 percent after four years, and 100 percent after five years.
The per-issuer gain cap rises from $10 million to $15 million, while the corporate asset limit increases to $75 million. These changes encourage investment in startups and reward early exits.
Better Treatment of Business Interest
For capital-intensive companies, financing just became more favorable. The business interest deduction limitation now uses EBITDA instead of EBIT, permanently. This allows companies to deduct more of their borrowing costs, making it easier to finance equipment, acquisitions, or expansions.
Additional Perks Worth Highlighting
Beyond the headline provisions, the Act includes several smaller but meaningful incentives.
The state and local tax (SALT) deduction cap has been raised to $40,000 through 2029, with entity-level deductions available for pass-throughs.
The estate and gift tax exemption climbs to $15 million per individual, indexed for inflation.
Employer-provided child care credits increase to $600,000 for small businesses with less than $31 million in receipts.
Opportunity Zones are made permanent, further incentivizing community-focused investment
Why Older Reddi Corps/LLCs Have the Edge
While these provisions benefit all entrepreneurs, businesses that are at least two to four years old gain some unique advantages.
Retroactive R&D deductions only apply if the business existed before 2022. Most lenders, investors, and grant programs require at least two years of operating history. The QSBS holding period starts at incorporation, meaning older corporations can already tap into exclusion benefits at the three or four year mark.
Even government procurement programs and certifications such as WBE, MBE, and DBE often require a minimum of two to three years in business.
For that reason, older entities, whether revived or acquired as aged shelf corporations, are increasingly valuable. They provide instant credibility, faster access to capital, and immediate eligibility for certain tax and investment benefits.
Using Entity Age as a Strategic Advantage
If you already own a corporation or LLC that is a few years old, this may be the perfect time to reactivate it, bring it into compliance, and use it as the foundation for your next venture. For new entrepreneurs, acquiring a clean, properly structured aged entity can accelerate timelines for financing, contracts, and tax benefits.
Older entities can also serve as parent companies, hold intellectual property, or issue QSBS-eligible shares, giving founders more flexibility when structuring growth or investment deals.
The Bottom Line for Entrepreneurs
The One Big Beautiful Bill Act is a landmark win for entrepreneurs and small businesses. With permanent bonus depreciation, stronger QBI deductions, restored R&D expensing, expanded QSBS benefits, and other tax breaks, it creates a fertile environment for growth, innovation, and investment.
For business owners, the message is clear. Use these incentives strategically, and if you have access to an older entity, leverage it. In today鈥檚 environment, age is not just experience, it is a financial advantage.
