Overall, the One Big Beautiful Bill Act (OBBBA) is friendly to corporations. For starters, it keeps the 21% corporate tax rate in effect in perpetuity (it was at risk of sunsetting after 2025). That doesn’t necessarily change how you file this year, but it does eliminate uncertainty moving forward.
On top of that, there are some direct ways the OBBBA will impact your 2025 tax filing. To help you understand what’s changing — and maximize the potential savings here — let’s look at a few key areas the Act shifts.
R&D expensing, no amortization required
The Act undoes a piece of legislation that’s made more work for American companies investing in R&D. Specifically, it eliminates the amortization requirement that the Tax Cuts & Jobs Act (TCJA) of 2017 instituted.
For the last handful of years, you could still deduct qualifying research expenses, but not in full in the year in which you paid them. Instead, you had to break the expense up into chunks and amortize it. If it were a domestically incurred expense, that amortization needed to happen over five years. For foreign qualifying research expenses, the required amortization period was 15 years.
With the implementation of the TCJA, this big boon to companies became both more complicated and less valuable. That makes changes from the Act particularly welcome.
Now that the Act is in place, the amortization requirement for qualifying domestic research expenses is completely gone. If it’s domestic, you can deduct the full amount in the year in which you pay for the expense. (Foreign expenses still need to be amortized.)
That means that when you file your 2025 taxes, you won’t have to worry about breaking those deductions up over five years. You should consequently see bigger, better tax savings this year for all of your domestic R&D.
More good news: the Act also lets you speed up some of what you’re still amortizing. You can take the full deduction remaining for any qualifying expenses you amortized between 2022 and 2024.
Say, for example, that you purchased lab materials in 2023. You deducted ⅕ of the cost in 2023, and another fifth in 2024. In 2025, you can deduct the remaining ⅗ of that expense.
Alternatively, you can spread the remaining unamortized amount over 2025 and 2026. Your accountant can help you figure out which path best fits your business.
Extra work, extra savings: Amended tax returns for R&D expensing
You might have the option to retroactively apply this immediate expensing to tax years prior to 2025, too. If your business has average annual gross receipts of $31 million or less for the last three taxable years, you’re a candidate for this potential added benefit.
Specifically, the Act lets qualifying small businesses amend tax returns for years 2022–2024. On the surface, that might seem like extra unnecessary work, since the Act already lets you get to full expensing in 2025.
But an amended return can offer a notable benefit to your company depending on its stage:
- If you were profitable and paid tax in those years, you can get cash back based on the amount you deduct on your amended return.
- If you weren’t yet turning a profit, it creates a bigger net operating loss (NOL) for your business. You can use those NOLs to offset your future taxable income. Also, in some scenarios (e.g., an M&A exit), bigger NOLs can offer a tax shield that investors like.
Again, talk with your accountant here. They can help you determine the most advantageous route for your company, whether that’s filing amended returns, choosing to fully amortize outstanding R&D expenses in 2025, or spreading that out over 2025 and 2026.
Bonus depreciation is back
With the OBBBA in place, companies can now claim 100% bonus depreciation on qualified assets they placed in service on or after January 20, 2025. That means you can immediately deduct the full cost of qualifying assets you put in service through the majority of this taxable year, including equipment, computers, some software, and more.
In short, with 100% bonus depreciation restored, you can see major tax perks for your capital expenditures. Bonus depreciation lets you either lower your taxable income or, if you’re still in your pre-profit stage, take a bigger NOL.
From EBIT to EBITDA for business interest deductions
The Act did away with another part of the TCJA. Per the TCJA, companies had to use calculations based on Earnings Before Interest and Taxes (EBIT) when calculating how much interest expense they could deduct in each taxable year.
Under the OBBBA, you’ll make calculations for your 2025 taxes based on Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), which should help you deduct more interest.
Bigger, easier qualifying small business stock (QSBS) tax treatment
The Act broadened the way the federal government treats qualifying small business stock (QSBS). In fact, §70431 of the Act is specifically titled, “Expansion of Qualified Small Business Stock Gain Exclusion.”
While this might not directly impact your corporate taxes, it could have major ramifications for your founders and investors. This tax treatment allows them to exempt these shares from capital gains taxes when they sell, so it’s a pretty huge benefit.
With that in mind, let’s go over three notable ways the OBBBA reshaped QSBS tax treatment.
Larger gross asset thresholds
Before the Act, your company could only issue qualifying small business stock if you had less than $50 million in aggregate gross assets immediately before and after stock issuance.
Under the Act, that threshold jumps up to $75 million, effective immediately. That amount will get indexed for inflation from 2027 on.
Bigger annual caps
QSBS historically had a lifetime cap of $10 million for each individual taxpayer. Any stock issued after the Act’s July 4th, 2025, implementation date is subject to a higher cap of $15 million.
Shorter holding period requirements
Shareholders still need to hold shares for five years to get 100% of the benefit from their QSBS. But if they want to cash out sooner, the Act now lets them exempt a percentage of their shares from capital gains: 50% when held for three years or 75% when held for four years.
This is a broad overview, but the Act shifted some other areas, too, like charitable contribution deductions. Talk with our team, and we can help you make sure you’re ready for all the ways the OBBBA will impact your 2025 tax filing. Get ahead of what’s coming and download our 2026 tax guide for a clear view of the rules, deadlines, and planning opportunities. Contact us today.
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