From Taxes to Lending: How the ‘Big Beautiful Bill’ Could Affect Your Business (and Your Wallet)
It’s official: the One Big Beautiful Bill (H.R. 1) became law on July 4, 2025. If you run a business, this new legislation may boost your tax savings, help with employee benefits, and even ease succession planning.
Here are the key changes you need to know, plus steps you can take and how Western State Bank is here to support you.
Related: [How the Big Beautiful Bill Could Affect Your Family & Your Household Taxes]
Big Equipment Write-Offs & Innovation Credits
Who this affects: Any individual or business considering equipment purchases
What’s changing:
The bill brings back 100% bonus depreciation and permanently boosts Section 179 deductions up to $2.5 million.
“Qualified property placed in service … before January 1, 2027, is eligible for 100% bonus depreciation.”
Why it matters:
If you’re planning to buy farm equipment, upgrade tech, or invest in machinery, you can write off that expense in the year it’s purchased. That could give your cash flow a boost.
What to do next:
If an equipment purchase is in your future, you may want to begin exploring financing options sooner rather than later.
Bigger Threshold for 1099 Forms
Who this affects:
Businesses with 1099 expenses
What’s changing:
The threshold for issuing 1099-MISC and 1099-NEC forms is increasing from $600 to $2,000.
Why this matters:
Fewer small payments to contractors, freelancers, or vendors will require a 1099, simplifying recordkeeping for many businesses.
When it takes effect:
This change won’t apply to 2025 forms but is expected to begin in 2026, giving you time to prepare.
Estate Planning, Family Succession & Capital Gains Relief
Who this affects:
Landowners, family farms, business owners, or any individual who intends to pass assets, ownership, or leadership to the next generation without heavy tax burdens.
What’s changing:
The federal estate, gift, and generation-skipping transfer tax exemption increases by about $1.1 million—to $15 million per person starting in 2026 (or $30 million for married couples). This means you can pass on up to $15 million to your heirs without paying federal estate taxes. Anything above that is still taxed. The bill also expands relief on capital gains for inherited businesses and provides smoother tax treatment when transferring family-owned businesses.
“Transfers of family businesses shall not trigger federal tax liabilities upon succession.”
Why it matters:
This higher exemption gives family farms and local businesses a better chance to stay in the family without being forced to sell assets to cover a big tax bill. It’s a meaningful boost for families planning long-term succession.
What to do next:
Include your loan officer in your succession planning, as well as your attorney and CPA.
ITIN-Holders May Be Affected
Who this affects:
Businesses with ITIN employees
What’s changing:
Individuals without valid Social Security numbers (such as ITIN-holding employees) will no longer qualify for certain family-related tax credits such as the child tax credit, even if their children hold SSNs. If you’re a business owner using an ITIN instead of a Social Security number, the new law likely won’t affect your business taxes. [Read more about how the OBBB affects individuals and personal finances]
Why it matters:
Without SSNs, your employees might receive significantly smaller tax refunds or owe more in personal taxes than in past years, which could lead to financial stress.
What to do next:
Connect your employees with tax professionals familiar with ITIN-related rules.
Qualified Production Property and Building Deductions
Who this affects:
Businesses & individuals considering new production facilities
What’s changing:
Section 168(n) creates a new category called qualified production property. This lets businesses that manufacture or produce tangible goods (excluding most food and beverage operations) write off the full cost of new facilities—100% depreciation—in the year they’re placed in service. To qualify, the building must be placed in service before January 1, 2031, and construction must have started after January 19, 2025.
A note about commercial buildings:
For commercial buildings with construction beginning between January 2021 and May 2025, parts of the building used for agricultural or chemical manufacturing, production, or refining (not including food or beverage) may also qualify for a full cost deduction. This part is still vague and likely to face further IRS regulations, so it’s important to check with your accountant before making decisions.
Why it matters:
If you’re expanding production facilities, this could mean significant upfront tax savings freeing up capital for equipment, staffing, or other growth needs. While the bill doesn’t specifically tie this benefit to “adding staff,” many businesses may find hiring becomes more feasible when facility costs are fully deductible.
What to do next:
Talk to your loan officer about financing solutions tailored to facility projects so you can take advantage of these deductions while keeping your cash flow steady.
Permanent Tax Breaks for Pass Through Entities (PTE)
Who this affects:
Small to mid-size business owners who operate as pass-through entities such as S Corporations, Partnerships, and LLCs taxed as partnerships or S Corps
What’s changing:
The 20 percent deduction for qualified business income (QBI) is made permanent and the phase out thresholds are increased from $100,000 to $115,000 for married filing joint return taxpayers.
Why this matters:
This increased deduction allows you to keep more business income for yourself or for additional investment in your business.
Support for Paid Leave, Childcare & Temporary Help
Who this affects:
Employers that offer Flexible Spending Accounts, paid leave, or childcare benefits, and any employer that is planning to hire temporary help during employee leave.
What’s changing:
The bill reinstates larger credits for businesses offering paid family or medical leave, childcare benefits, or hiring temporary help during employee leave. Starting 2026, the Dependent Care FSA (Flexible Spending Account) cap rises to $7,500.
Why this matters:
Even smaller businesses can qualify. These credits may reduce your payroll expense and support your team’s stability. If your business offers an FSA, the increase to the cap could also serve as a recruitment tool.
What to do next:
Update your benefits plans before year-end. And if you need help with payroll or tax credit details, contact your local accountant.
No Payroll Paperwork Panic…Yet
That means your W-2s, 1099s, Form 941s, and other payroll forms will look just like they do now for this tax year. The same goes for federal income tax withholding — no updated tables until next year. Employers and payroll providers can keep using their current systems and procedures for now.
The changes will roll out later, so you’ll have time to adjust before anything new hits your desk.
What’s Next: Steps for Business Owners
- Identify equipment you plan to purchase or that you can write off now.
- Revisit your estate or succession planning in light of new rules.
- Evaluate expansion plans for incentives.
- Review your business structure for QBI benefits.
- Update employee benefits and payroll systems to claim leave or childcare credits.
External Resources for Deeper Reading
- Full text of H.R. 1: Congress.gov
- RSM commentary on bonus depreciation: rsmus.com
- QBI changes summary: Business Insider