For business owners across the USA, tax season can feel unpredictable. Rules change, deductions expire, and what you could access last year may be gone the next. But every so often, the tide turns in your favor, and this is one of those moments.
The One Big Beautiful Bill (OBBBA) was signed into law on July 4, 2025. This bill made permanent many of the temporary tax law changes first introduced under the Tax Cuts and Jobs Act (TCJA) back in 2017. In a single, sweeping piece of legislation, provisions that were on the verge of expiring entirely are back. For business owners, the timing could not be better. The OBBBA restored 100% bonus depreciation, raised the Section 179 expensing limit to $2.5 million, and increased the Qualified Business Income (QBI) deduction.
In short, deductions that had been phasing out or were about to be eliminated have returned. These revamped deductions could meaningfully reduce your tax liability this filing season.
In this article, Expense to Profit walks you through the key business deductions that have made their return. We will also review what they mean for your bottom line and how to ensure you are best positioned to take full advantage of them before the filing deadline.
Expansion of the Employer Child-Care Credit
Offering childcare support to employees has always been the right thing to do. Now, thanks to the OBBBA, it is also a significantly smarter financial decision.
The old version of this credit was modest at best. Before, businesses could recover 25% of qualifying child-care expenses up to a ceiling of $150,000 annually. To put that in perspective, you will need to spend at least $600,000 on employee child care just to max it out. For most businesses, that math did not add up.
The updated rules are far more generous. Large businesses can now recover 40% of qualifying expenses, with the annual credit ceiling raised to $500,000. Small businesses, those with 50 employees or fewer, get an even better deal: 50% of qualifying expenses covered, up to $600,000. Both figures are inflation-adjusted going forward.
If you have been holding off on building child care into your benefits structure, the financial case just got a lot harder to ignore.
Special Depreciation for Qualified Production Property
This provision is brand-new. This did not exist before the OBBBA, and for businesses involved in domestic manufacturing, agricultural processing, or refining, it is significant.
Under the old rules, nonresidential commercial property used for production purposes was depreciated over 39 years. That is nearly four decades of spreading out a deduction that you needed yesterday. The new provision scraps that timeline entirely for eligible businesses. It is now replaced with a 100% first-year deduction on the adjusted basis of qualifying production property.
To qualify, construction must have begun after January 19, 2025, and before January 1, 2029, with the property placed in service before January 1, 2031. The property use must also be an active part of a qualifying U.S. production activity. Office space, administrative facilities, parking structures, and software development spaces are excluded.
For businesses planning to build, expand, or upgrade domestic production facilities within this window, the tax math has shifted dramatically in your favor.
Business Property Credit (Bonus Depreciation)
If you have been tracking bonus depreciation over the past few years, you will know it has been on a slow, frustrating decline. The TCJA put it on a phase-down schedule. That schedule looked like this: 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026 — and then gone entirely by 2027.
That countdown is now officially canceled. The OBBBA permanently restores bonus depreciation to 100% for qualified property placed in service after January 19, 2025. This applies to both new and used tangible personal property with a recovery period of 20 years or less. This includes machinery, equipment, computers, furniture, and certain building improvements.
Permanent means permanent. Businesses can now plan capital investments with confidence, knowing this deduction is not scheduled to disappear. The new approach removes all guesswork for asset-heavy operations that have timed their purchases around the phase-down.
Business Interest Tax Deduction
This one requires a little accounting context, but the payoff is worth understanding.
For several years, the calculation of business interest deductibility used an EBIT-based formula. This meant that depreciation and amortization were excluded from the calculation of adjusted taxable income. The effect was a smaller denominator, resulting in a lower deduction cap for many businesses.
The OBBBA permanently restores the more favorable EBITDA-based calculation for tax years beginning after December 31, 2024. By adding depreciation, amortization, and depletion back into the adjusted taxable income figure, the cap on deductible interest rises. This can be substantial depending on your business’s size and structure.
For businesses carrying meaningful debt, whether tied to equipment, real estate, or working capital, running these new numbers with your tax advisor could surface deductions that you were unable to access before.
Research and Development Credit
The R&D deduction took a significant hit under the TCJA. The changes required businesses to spread domestic research costs over a 5-year amortization period rather than deducting them in the year they were incurred. The result was higher short-term taxable income and a credit that lost much of its immediate appeal.
That restriction is no longer in effect. For tax years beginning after December 31, 2024, businesses can once again deduct 100% of qualifying domestic research and experimental costs in the year they occur. The new law goes a step further for smaller businesses with gross receipts of $31 million or less. The new bill allows retroactive deductions for qualifying R&D expenses, back to tax years beginning in 2022.
It bears repeating: the R&D credit is not just for scientists and software engineers. Businesses across manufacturing, food production, engineering, and dozens of other sectors qualify. If your team has spent time solving technical problems, improving processes, or developing new products, there is a strong chance money has been left on the table. The new updates to the rules offer a real path to recovering it.
Increased Expensing for Depreciable Business Assets (Section 179)
Section 179 has always been one of the more practical tax tools available to business owners — the ability to immediately write off the full cost of a qualifying asset purchase rather than recover it slowly over the years. The limitation has always been the cap.
That cap just doubled. The OBBBA raises the immediate expensing limit from $1.25 million to $2.5 million for 2025, with the phase-out threshold increased to $4 million of qualifying property placed in service in a given year. Both figures are now tied to inflation, meaning they will adjust over time rather than quietly eroding in real value.
Qualifying assets include equipment, machinery, vehicles, technology, and certain building improvements. For businesses deliberating major purchases, this expanded limit, combined with the restored bonus depreciation, creates a compelling window to invest in what your operations actually need while letting the tax code do some of the heavy lifting.
Extension of the Paid Family and Medical Leave Act Credit
For years, the Paid Family and Medical Leave credit existed in a kind of legislative limbo, valuable enough to use, but uncertain enough that building it into long-term benefits planning felt risky. Every year brought the possibility that it might simply expire.
That uncertainty is gone. The OBBBA makes the PFML credit permanent and expands it in meaningful ways. The prior version covered wages paid to qualifying employees on leave at a rate tied to the wage replacement percentage, up to 25% for the most generous leave policies. The updated law extends that coverage to include employer-paid family leave insurance premiums. It also reduces the minimum employment eligibility period from one year to six months, broadening the pool of employees whose leave qualifies for the credit.
For businesses that already offer paid leave, this is additional money that they can use. This credit rewards a policy you are already funding. For those who have not yet introduced paid leave benefits, the permanence of this credit eliminates one of the most commonly cited financial objections to doing so.
Many of these provisions carry specific effective dates, phase-out thresholds, and eligibility conditions that require careful attention. Claiming the wrong amount, missing a qualification requirement, or overlooking a transitional rule can turn a tax win into a compliance headache.
The smartest move you can make right now is to speak with a qualified tax advisor like Expense to Profit. Our experts can walk through each of these deductions in the context of their specific operations, structure, and investment plans.
Conclusion
Tax seasons that genuinely favor the business owner do not come around often. This one does, and the provisions outlined above represent some of the most accessible and impactful deductions and credits the U.S. tax code has been offered in years. Whether you are investing in production facilities, expanding employee benefits, or finally claiming the R&D credit your business has always qualified for, the window is open.
At Expense to Profit, we work alongside business owners across the USA to identify every available opportunity for cost reduction and financial optimization, including tax strategy. Reach out to us today, and let us make sure your business walks away from this tax season with every dollar and all deductions that it is entitled to.
