The One Big Beautiful Bill: What Business Owners Need to Do Right Now

That gap, between knowing the rules changed and adjusting how you operate, is where the opportunity lives right now.

That gap, between knowing the rules changed and adjusting how you operate, is where the opportunity lives right now. The law made four significant changes to the tax code that affect how business owners invest, borrow, structure their entities, and plan for the future. Each one has implications that run across your full business picture. Here is what changed and what it means across all four LIFT systems: Legal, Insurance, Financial, and Tax.

What Changed

Before getting into what to do, it helps to understand exactly what the law did.

Bonus depreciation is now permanent at 100 percent. Before the One Big Beautiful Bill, bonus depreciation had been phasing down and was set to expire. The new law restores full, immediate expensing for qualifying business assets and makes it permanent. If you purchase equipment, machinery, or other qualifying assets for your business, you can deduct the full cost in the year of purchase rather than depreciating it over several years.

The Section 199A pass-through deduction is now permanent. This provision allows owners of pass-through entities, including S corporations, partnerships, LLCs taxed as partnerships, and sole proprietors, to deduct 20 percent of qualified business income from their taxable income. It was set to expire at the end of 2025. The new law makes it permanent, and it also expanded the income thresholds at which phaseout rules begin to apply.

Domestic R&D expenses can be immediately deducted again. A 2017 rule had required businesses to amortize research and development costs over five years rather than deducting them in full in the year they were incurred. The new law reverses that, restoring immediate expensing for domestic R&D costs.

Business interest deductibility improved. The law restores the ability to add back depreciation, depletion, and amortization when calculating adjusted taxable income, which effectively raises the ceiling on how much business interest can be deducted.

Legal: Does Your Entity Structure Still Make Sense?

The permanent 199A deduction is one of the most valuable provisions in the new law for small and mid-size business owners. But it does not apply equally to all entity types, and the benefit it produces depends heavily on how your business is structured.

S corporations, partnerships, and sole proprietors all potentially qualify. C corporations do not benefit from 199A because their income is taxed at the entity level, not passed through to the owner. Service businesses face additional limitations based on income levels.

If you formed your entity years ago, or if your income or business structure has changed significantly, the entity structure you have may not be the one that makes the most sense today. The 199A deduction being permanent means this is not a one-year optimization. It is a long-term planning decision.

Your operating agreement or shareholder agreement may also need to be reviewed. If your business has grown, taken on partners, or changed in how it distributes income, the governing documents need to reflect the current reality.

The bottom line: A permanent 199A deduction is valuable, but only if your entity structure is positioned to use it. The time to review that structure is now, not at year-end.

Insurance: Did Your Assets Change When You Weren't Looking?

Full bonus depreciation is a tax benefit. It is also a signal that something changed in your business: you acquired assets. And when you acquire assets, the coverage those assets need changes too.

Business owners who take advantage of bonus depreciation to make significant equipment or asset purchases often do so without updating their property or liability coverage. An asset that is fully expensed for tax purposes is still a physical asset that can be lost, damaged, or involved in a claim.

There is also an opposite scenario worth watching. If you are expensing assets immediately rather than depreciating them, the book value of your business looks different to underwriters than it did before. That can affect how your coverage is written and what limits are appropriate.

The bottom line: Every significant asset purchase that takes advantage of bonus depreciation should trigger a coverage review. The tax benefit and the insurance gap can appear in the same year if you are not coordinating both.

Financial: The Investment and Capital Decisions Look Different Now

100 percent bonus depreciation changes the after-tax cost of capital expenditures. An equipment purchase that would have produced a deduction spread over seven years now produces a full deduction this year. That changes the math on whether to buy now, lease, or wait.

For businesses with available capital or access to credit, the current environment is worth a conversation with your financial advisor about whether purchases you have been deferring make more sense to accelerate. The timing of when you buy matters in a way that it did not when depreciation was being phased down.

The improved business interest deductibility also affects borrowing decisions. For businesses that carry debt, the after-tax cost of that interest is now lower than it was under the prior rules. That changes the calculus on financing growth.

For businesses that invest in innovation, the restoration of immediate R&D expensing means research dollars go further on an after-tax basis. If you have been holding back on product development, technology investment, or process improvement because the tax treatment was unfavorable, that constraint is now removed.

The bottom line: The law changed the economics of capital decisions, borrowing, and R&D investment. Those decisions should be revisited with your financial advisor in light of the new rules, not made the same way they were made before.

Tax: This Is the Year to Coordinate, Not Just Comply

Each of these provisions creates a benefit. What most business owners miss is that the provisions interact with each other, and uncoordinated decisions can leave money on the table or create unexpected consequences.

Bonus depreciation reduces taxable income in the year of purchase. That reduction affects how the 199A deduction is calculated, because 199A is based on qualified business income. More depreciation in one year can reduce the 199A benefit in that same year. The right answer depends on your full income picture, your entity structure, your W-2 wages, and your qualified property basis.

These are not afterthoughts. They are the design of the plan. The business owners who benefit most from the new law are the ones who let the Tax system inform the Financial system and the Legal system simultaneously, rather than treating each as a separate conversation.

The bottom line: This is not the year to let your accountant file and your attorney and financial advisor wonder what happened. The law changed in your favor. Getting the full benefit requires a coordinated review across all four systems.

What You Can Do Right Now

The One Big Beautiful Bill passed in 2025. If you have not yet reviewed your entity structure, your insurance coverage, your capital expenditure plans, and your tax strategy in light of the new rules, you are operating under a law that has not fully been applied to your situation.

As a Personal Family Lawyer® firm and LIFTed Advisors™ attorney, I look at your full business and personal picture through the LIFT - Legal, Insurance, Financial, &Tax®  systems , identify where the gaps are, and map out what needs to happen and in what order. The new law creates real opportunities for business owners who act. It also creates new planning traps for those who do not.

Click here to schedule a complimentary 15-minute consultation to learn more and get started today:

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