Breaking Down the One Big Beautiful Bill Act

Business Planning

Reflection of the Week

Breaking Down the One Big Beautiful Bill Act

Happy Friday, all!

I’ve been waiting to write about the One Big Beautiful Bill Act (OBBBA) since it passed on July 4, 2025—not because it’s not important, but because I’ve learned from experience that we can’t start planning based on headlines. Back in 2017, when the Tax Cuts and Jobs Act passed, and again during the height of COVID relief when I was writing for Forbes, I watched waves of articles spark panic before the ink was even dry. My rule? Don’t panic, don’t plan—until the bill actually becomes law.

But now the OBBBA is here, and like it or not, it’s time to talk about what it means—especially for those of us running mission-driven businesses.

This law is sweeping, with modified tax rates, administrative reforms, and funding initiatives affecting everything from R&D to healthcare. I’ll comment on related updates over time, but here are the highlights for impact-focused entrepreneurs:

  • SALT Deduction Cap Increased: Raised from $10,000 to $40,000 through 2029, phased out between $500k–$600k MAGI.
  • QBI Deduction Extended: The 20% deduction for pass-through income (Section 199A) remains in place, continuing to support LLCs and S corporations. Additionally, the phase-out ranges have also increased.
  • Bonus Depreciation & R&D Expensing Made Permanent: Encourages investment in capital and innovation.
  • 1099 Thresholds and Filing Relief (from $600 – $2,000): Reduces paperwork burdens for small businesses.

Special Note on State-Level Pass-Through Entity Taxes (PTET)

Many of my business owners are S-Corps, in part to take advantage of the Pass-Through Entity Tax (PTET). That workaround allowed S-Corps to deduct state income taxes at the entity level, which were previously capped by the SALT deduction. Several versions of this bill threatened to limit the ability to do this; however, the final version of the bill does not include any restrictions.

However, now that the SALT deduction cap is rising to $ 40,000, the calculus changes again—especially for business owners in high-tax states like D.C., New York, California, and Illinois, where we’ve had to balance the PTET with those states’ (and some cities’) tax on corporate entities. This new cap could reduce the pressure to use complex structures, or—when used strategically—amplify the benefit of those structures.

For mission-driven business owners, this means more cash flow flexibility, less tax code contortionism, and more space to focus on what really matters: growing your impact.

Questions of the Week

  1. How might the higher SALT cap free up reinvestment into your team, projects, or community initiatives?
  2. With permanent bonus depreciation, what next-level offerings or mission-based innovation could you pursue?
  3. What part of your structure might benefit from a fresh look under this law?

Tools of the Week

You’ve likely seen A LOT of articles on the OBBBA. To save you some time looking, here are some of my favorites to peruse:

This is just the beginning. As the Treasury and the IRS issue further guidance, I’ll continue to share what is emerging and how to make the most of it. You’ve got the heart—and now you’ve got new tools to power your mission with greater financial ease.

Wishing you clarity, courage, and alignment this weekend!

— Brian

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