The Big Beautiful Breakdown—How the New Bill Affects Business Owners

Running a business? The Big Beautiful Bill (OBBB) delivers a package of tax benefits designed to help you invest more, hire smarter, and keep more of your profits. Here’s how it works:

 1. Corporate Tax Rate Set Permanently at 21%

C corporations now pay a flat 21% tax rate, down from 35% — permanently.

 Example: A company earning $1M in taxable income now saves $140,000 per year compared to the old rate.

 2. Pass-Through Business Deduction Increased to 23% (Permanent)

If you’re an LLC, sole proprietor, S corp, or partnership, you can permanently deduct 23% of your qualified business income (QBI) from your taxable income.

• Applies to most service and non-service businesses
  
  

• Income phaseout begins at $182,100 (single) or $364,200 (married) in 2025 (indexed annually)
  
  

 Example: $200,000 in QBI? Deduct $46,000 before taxes — huge boost to cash flow.

 3. 100% Bonus Depreciation Through 2029

Buy new or used qualifying business assets (equipment, vehicles, software)? Deduct the entire cost upfront, instead of depreciating over years.

• 100% write-off available through 2029
  
  

• Phases down gradually after 2029
  
  

 Example: Buy $100K in equipment? Deduct all $100K in year one.

 4. Section 179 Expensing Increased (Permanent)

• Deduct up to $2.5 million per year in qualifying business assets
  
  

• Phaseout starts at $4 million in total purchases
  
  

• Still great for small businesses needing new tools, tech, or vehicles
  
  

 Tip: Use Section 179 first, then bonus depreciation for anything over the limit.

 5. Expanded R&D Tax Credit (Permanent)

• Small businesses can now offset up to $750,000 of payroll taxes with R&D credits (up from $500,000)
  
  

• Covers things like software dev, product testing, process improvement
  
  

 Tip: Applies even if you’re not profitable — huge for startups.

 6. Simplified Home Office Deduction (Permanent)

Deduct up to $2,500/year for a dedicated home office used exclusively for business.

• No need to calculate actual expenses — simple flat rate
  
  

• Works for self-employed individuals and gig workers
  
  

 Tip: Must be a separate space — a desk in your bedroom doesn’t count.

 7. Small Business Health Care Tax Credit Increased (Permanent)

• Covers up to 60% of premiums for businesses with fewer than 25 employees
  
  

• You must pay at least 50% of each employee's premiums
  
  

• Credit is available for two consecutive years
  
  

 Tip: Use this to start offering health benefits affordably.

 8. Employee Retention Credit (ERC) Extended Through 2025

• Get up to $10,000 per employee for keeping or rehiring workers
  
  

• Applies to businesses in distressed or disaster areas
  
  

 Tip: Combine with WOTC and startup credits for serious hiring support.

 9. Retirement Plan Startup Credits Expanded (Permanent)

• Up to $5,000/year for 3 years to cover retirement plan setup
  
  

• Plus up to $1,000 per employee in matching contribution credits
  
  

• Must have fewer than 50 employees
  
  

 Tip: Great incentive to start a 401(k) or SIMPLE IRA for your team.

 10. Green Energy Tax Credits (Through 2032)

• 30% tax credit for installing solar, wind, or other renewable energy systems on business property
  
  

• Available through 2032 under the extended Inflation Reduction Act rules
  
  

 Tip: Combine this with long-term energy bill savings.

11. Work Opportunity Tax Credit (WOTC) Extended Through 2029

• Credit of up to $9,600 per new hire from qualifying groups
  
  

• Includes veterans, long-term unemployed, and SNAP recipients
  
  

 Tip: Claim WOTC when hiring — it adds up fast.

 FAQs for Business Owners

Q: Can I claim both Section 179 and bonus depreciation?
A: Yes! Use Section 179 first, then apply bonus depreciation to the rest.

Q: Is the R&D credit refundable?
A: It offsets payroll taxes — up to $750,000 — so yes, it's like getting money back even if you owe no income tax.

Q: How do I qualify for the health care credit?
A: Have fewer than 25 full-time employees and pay at least 50% of their health premiums.

 Pro Tips for Maximizing Your Tax Benefits

• Keep detailed records of all purchases, hires, and expenses
  
  

• Consult your tax professional before buying equipment or launching a benefit plan
  
  

• Track employee data to claim the ERC and WOTC
  
  

• Bundle tax credits (like R&D, green energy, and hiring credits) for maximum savings
  
  

These incentives are designed to promote small business growth, investment, and hiring. Business owners should visit us at hackyourtax.com for more information!