Have you Heard of the OBBB?

July 30, 2025

The One Big Beautiful Bill Act’s Impact on American Business Owners.

By: Melissa Fish, Esq.

“A big business starts small.”

- Richard Branson

Signed into law by President Trump on my birthday – July 4, 2025 – the One Big Beautiful Bill Act (the “Act”) creates several new tax deductions for American business owners. In this article I will walk you through the provisions of the Act which are most interesting to me as a corporate and mergers and acquisitions attorney.

1.             Upgraded Qualified Small Business Stock incentive.

One of my areas of specialization is assisting clients with the purchase and sale of corporate stock. Since the Act was signed into law, selling shareholders are now able to take advantage of an upgraded Qualified Small Business Stock tax incentive (“QSBS”). Under the Act, corporate shareholders can exclude an increased portion of capital gains from their federal income tax (greater of $15 million or 10x stock basis), as well as qualify for QSBS under a higher threshold of gross assets (up to $75 million); further stimulating investment in small business.

2.             Extension to Bonus Depreciation.

Another area that’s especially exciting to me as an M&A attorney is the impact on bonus depreciation for my clients in asset acquisitions. The Act creates a permanent extension of 100% first-year bonus depreciation, which means buyers can fully deduct the cost of qualifying assets up front. This create a powerful post-closing tax benefit which is certain to influence deal structure and purchase price allocation.  

3.             From EBITDA to EBIT and Back Again.

The Act also transitions us back to an EBITDA based calculation for adjusted taxable income (“ATI”) under Section 163(j) of the U.S. tax code. The US government restricts the amount of business interest expense that companies can deduct from their taxable income. Moving from EBIT to EBITDA, via the Act, allows companies to deduct a great total amount because they are adding back depreciation and amortization to their ATI before calculating their 30% deduction. This is great news for companies with substantial interest expense or those in capital intensive industries.

4.             Preservation of the Qualified Business Income Deduction.

For sole proprietors, partnerships, and S corporations (as well some trusts and estates) the Act preserves the qualified business income deduction (also called the Section 199A deduction) (“QBI”). This means eligible taxpayers can continue to take advantage of the 20% deduction of their QBI (as well as REIT and PTP), which would have sunset on December 31, 2025. Additionally, the income threshold for the deduction has been increased from to $75,000 (single filers) and $150,000 (married taxpayers filing jointly).

This is just the tip of the iceberg when it comes to how the Act is shaping the future for American businesses. Whether you're growing, investing, or preparing to sell, now is a great time to explore how these tax benefits can work in your favor.

Questions or comments? Contact Melissa Fish, legal@melissfish.com.    

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