On July 4, 2025, the tax laws impacting America’s entrepreneurs shifted with the signing of the “One Big Beautiful Bill” (OBBB) Act. This comprehensive tax reform package rewrites the rules of business ownership and investment, creating a new set of tax laws for businesses of all sizes.
This article explores how the OBBBA’s provisions affect everything from business structure to capital deployment, highlighting the opportunities and challenges entrepreneurs must navigate to gain a competitive advantage in this transformed tax era.
Table of Contents:
- Enhanced benefits for startup investors in qualified small business stock
- Maximizing profitability with permanent business expense deductions
- Permanent relief for entrepreneurs in business income
- Tax benefits for production and manufacturing entrepreneurs
- Global business considerations for entrepreneurs
- Opportunity zones and capital deployment strategies
- Strategic tax planning under the new law
- Seizing new opportunities in the transformed tax landscape
Enhanced benefits for startup investors in qualified small business stock
President Trump’s signature legislation offers numerous tax-savings provisions, but one change in particular stands out for new businesses: the significant expansion of qualified small business (QSB) stock benefits. These QSBS provisions could offer a lifeline to early-stage companies struggling to secure funding.
The OBBBA moves the gross asset threshold to $75 million, opening powerful tax incentives to invest in growing businesses that were previously excluded by the old $50 million cap.
The new tiered exclusion system signals a fundamental shift in the tax code. While it has traditionally rewarded patient capital, now businesses don’t have to wait for five years to capture any benefit. Now, investors can capture meaningful tax advantages earlier:
- 50% exclusion at three years
- 75% at four years
- 100% at five years and beyond.
This graduated approach aligns well with typical startup growth trajectories and funding rounds.
For entrepreneurs closing larger rounds, the increased per-issuer gain exclusion cap of $15 million (now inflation-adjusted, starting in 2027) provides additional headroom for substantial returns.
This expansion particularly benefits founders, early employees, and investors who often hold significant equity positions. For a detailed analysis of these enhanced provisions, check out our updated Guide to Qualified Small Business Stock (QSBS). It offers comprehensive guidance on maximizing these new business investment benefits.
Maximizing profitability with permanent business expense deductions
A significant element of the “One, Big, Beautiful, Bill” (OBBBA) lies in its treatment of business expenses, starting with the permanent restoration of 100% bonus depreciation. For entrepreneurs acquiring qualified property after January 2025, this means immediate deduction of the full purchase price—a powerful tool for managing taxable income and improving cash flow.
Perhaps even more significant is the reversal of R&D expense treatment. The days of stretching research and experimental costs over a five-year window are long gone. Under the new legislation, entrepreneurs can fully expense these investments in innovation immediately, providing a substantial boost to companies heavily invested in research, product development, and technological advancement.
And as the U.S. Chamber of Commerce points out, this ability to expense R&D applies retroactively to 2022—for businesses with less than $31 million in gross receipts. This provision is especially beneficial for small, domestic companies reinvesting in innovation.
To enhance flexibility for entrepreneurs, the OBBBA permanently adopts the more generous EBITDA-based calculation, making debt financing more attractive, particularly for capital-intensive ventures that rely on leverage for growth.
The OBBB also makes several employee-focused tax credits permanent. These include the paid leave credit—even in states with mandatory leave—as well as expanded childcare and student loan repayment credits.
Entrepreneurs can now claim up to 50% of the cost of offering on- or off-site childcare, and contribute up to $5,250 tax-free toward each employee’s student loans. These credits can help small businesses compete for talent in a tight labor market.
Permanent relief for entrepreneurs in business income
The OBBBA’s commitment to entrepreneurial growth shines through in its handling of Section 199A which governs qualified business income deduction. What was once a temporary provision now stands as a permanent fixture of the tax code, offering lasting certainty for business owners operating through pass-through entities.
Higher income thresholds for phase-outs mean more successful entrepreneurs can fully utilize this valuable 20% deduction. This expansion particularly benefits growing businesses that previously found themselves bumping against the old limitations, forcing difficult decisions about income timing, business structure, and business structure.
For business owners deciding between pass-through and corporate structures, the permanent nature of this provision tips the scales. Entrepreneurs can now make these crucial decisions with confidence, knowing the rules will not suddenly change in a few years.
The new law also raises the federal SALT deduction cap from $10,000 to $40,000 annually. For entrepreneurs in high-tax states like New York or California, this helps preserve more business-related deductions and improve overall cash flow.
Tax benefits for production and manufacturing entrepreneurs
Manufacturing entrepreneurs are at a watershed moment with the OBBBA’s introduction of 100% expensing for qualified production property. This unprecedented provision allows immediate write-offs for production facility costs, fundamentally altering the economics of domestic manufacturing investment.
Here is the real power play: strategic timing of facility investments can transform balance sheets. A manufacturer planning a new facility can potentially deduct the entire cost in year one, rather than spreading it over decades. Instead of merely influencing tax planning, investment decisions, and cash flow, this change reshapes the entire financial calculus of domestic production decisions and underscores the Trump administration’s commitment to reshoring American production jobs.
Global business considerations for entrepreneurs
Because economies are increasingly interconnected, even small businesses commonly find themselves operating across borders. The OBBBA’s modifications to international tax provisions demand attention from entrepreneurs with global aspirations. Changes to GILTI (Global Intangible Low-Taxed Income) and FDII (Foreign-Derived Intangible Income) calculations create new considerations for companies serving international markets or maintaining overseas operations.
The law also locks in rules that make it easier for entrepreneurs with overseas operations to structure their businesses without unexpected tax consequences.
Entrepreneurs importing physical goods should also be aware of rising tariffs, particularly for items like semiconductors, EVs, aluminum, or steel. The U.S. Chamber has already warned that small businesses already importing from non-USMCA countries like Brazil or Mexico may face up to 50% tariffs as early as August 2025.
Opportunity zones and capital deployment strategies
The OBBBA’s treatment of opportunity zones creates a new playing field for strategic capital deployment. To ensure long-term planning capability, the new law makes these tax advantages permanent. This measure makes future economic investment attractive (tax-efficient) for entrepreneurs and benefits the communities served.
The bill’s new framework for predictable renewal cycles is especially appealing to investors. With zones redetermined every decade starting in 2026, entrepreneurs can plan their investment strategies around known, longer-horizon intervals.
This predictability removes much of the risk and guesswork from opportunity zone investing. Many forward-thinking entrepreneurs are already incorporating Opportunity zones into broader capital allocation strategies.
Strategic tax planning under the new law
In the wake of the “One, Big, Beautiful Bill Act” (OBBBA), the choice among different business structures becomes even more important. The permanence of key provisions means entrepreneurs must carefully weigh the compounding effects of their entity selection. Pass-through entities (like LLCs and S-corporations) might make more sense for some, while others might find C corporations (with limited liability and greater ease to raise money from investors) better suited to their goals under the new framework.
Timing is everything. Manufacturing entrepreneurs, in particular, need to carefully choreograph their investments to maximize both production property expensing, and QSBS qualification timing. These decisions can mean the difference between modest tax savings and transformative financial outcomes.
Professional guidance becomes increasingly vital, as the OBBB’s true impact for entrepreneurs is playing out now in real time.
Harness’s tax advisors specialize in helping small-business owners and entrepreneurs thread these various provisions together into coherent, flexible, and profitable strategies to maximize available tax advantages while maintaining operational speed.
Seizing new opportunities in the transformed tax landscape
Beyond simple tax reform, the OBBBA represents a fundamental reimagining of how the tax code interacts with (encourages) entrepreneurial ambition. For the first time in decades, entrepreneurs can make long-term plans with confidence, knowing that key provisions will not suddenly vanish in a few years.
Success in this new environment demands both strategic thinking and expert guidance.
Get started with Harness today to develop a customized plan that repositions your business to capture the full value of these unprecedented tax updates.
In this business-friendly era, the entrepreneurs who thrive will be those who best leverage these new rules to their advantage.
Disclaimer:
Tax related products and services provided through Harness Tax LLC. Harness Tax LLC is affiliated with Harness Wealth Advisers LLC, collectively referred to as “Harness Wealth”. Harness Wealth Advisers LLC is a paid promoter, internet registered investment adviser. Registration does not imply a certain level of skill or training. This article should not be considered tax or legal advice and is provided for informational purposes only. Please consult a tax and/or legal professional for advice specific to your individual circumstances. This article is a product of Harness Tax LLC.
Content was prepared by a third-party provider and not the adviser. Content should not be regarded as a complete analysis of the subjects discussed. Although we believe the content is reliable, it is not guaranteed as to accuracy and does not purport to be complete nor is it intended to be the primary basis for financial or tax decisions.