What the OBBBA means for small businesses this tax season

Tax season is underway, and this year it comes with significant changes under the recently enacted “One Big Beautiful Bill” Act (OBBBA). On today’s episode of Business Trends Today, U.S. Chamber of Commerce VP of Small Business Policy Tom Sullivan breaks down what these changes mean for small to mid-size businesses.

Signed into law in July, the OBBBA includes substantial tax reforms designed to support small business growth. Many of the provisions are now available, including for expenses dating back to January 20, 2025. While the U.S. Chamber of Commerce spent more than a year advocating for the bill’s passage, Sullivan says the work didn’t stop there. The Chamber is now leading a nationwide education campaign to ensure business owners understand how to take advantage of the new law.

"Now is the time to get with your tax advisor to plan ahead for how you're going to grow your business, with the IRS enabling you to keep more of your hard-earned money so that you can pour that back into the business."

To support that effort, the Chamber has released a tax one-pager and built a dedicated landing page outlining the key provisions. It’s also hosting roundtables across the country alongside members of Congress, local chamber leaders nd small business owners to raise awareness. Many entrepreneurs still aren’t aware of the benefits, which could mean they unintentionally leave significant capital on the table this tax season.

One of the most impactful changes under the new tax law is the doubling of tax write-off limits. Section 179 expensing limits have increased, allowing businesses to deduct more of the cost of equipment, software and furniture purchases upfront. Bonus depreciation has also doubled, enabling many investments to be expensed at nearly 100% immediately. The purpose of these expanded deductions is to free up capital and incentivize small businesses to reinvest in their operations and fuel continued growth.

Another major win for small businesses is the permanent extension of the 20% Qualified Business Income (QBI) Deduction. In previous years, uncertainty around expiring provisions made long-term planning difficult. With the QBI deduction now permanent, small business owners can plan more confidently for future tax years and make strategic growth decisions with greater certainty.

That law also restores immediate expensing of qualifying research and experimental (R&E) expenses. Historically, businesses were allowed to deduct these costs immediately. However, beginning four years ago, Congress required companies to amortize those expenses over five, 10, or even 15 years, tying up capital and limiting reinvestment.

Under OBBBA, small businesses that have been amortizing R&D expenses over the past three years can file amended returns to recover previously spread-out deductions. Because the change is retroactive, many businesses may be eligible for refunds.

This provision is especially critical for small businesses, which are often at the forefront of innovation. Immediate expensing helps level the playing field, allowing smaller firms to compete not only with larger domestic competitors but also in the global marketplace. Freeing up capital for innovation strengthens both individual businesses and the broader U.S. economy.

The immediate expensing of R&D expenses is a major win for small businesses and America as a whole. Small businesses are extremely innovative, and being able to immediately expense R&D is what enables them to compete with larger businesses not only within the American economy but also on a global scale.

As tax season progresses, Sullivan encourages business owners to be proactive. Those using tax software should prompt their programs to explain how the new law applies to their situation. Business owners working with CPAs or tax advisors should begin the conversation with a direct question: “Which parts of the new tax bill benefit my business?”

With many provisions already in effect, now is the time for entrepreneurs to carefully review the changes. Business owners are encouraged to visit the U.S. Chamber of Commerce’s detailed summary and download the One Pager Guide to review with their tax professional.