Does the One Big Beautiful Bill Act apply to my 2025 tax return?

Yes, most of it does. The law was signed in July 2025, but its core provisions are retroactive to January 1, 2025, so they apply to the return you file in 2026. That includes the higher standard deduction ($15,750 single, $31,500 married filing jointly, $23,625 head of household for tax year 2025), the permanent QBI deduction, and 100% bonus depreciation on qualifying property placed in service after January 19, 2025. A few pieces are not retroactive, most notably the new $2,000 Form 1099-NEC threshold, which does not start until payments made after December 31, 2025.

Is the 20% QBI deduction permanent now?

Yes. Section 199A was scheduled to expire after 2025, and the One Big Beautiful Bill Act made it permanent at 20%. It also widened the phase-in ranges for specified service businesses and added a minimum deduction for taxpayers with meaningful active business income. For a Florida S-Corp or LLC owner, this removes the single largest planning uncertainty of the last several years. You no longer have to structure around a deduction that might vanish, which changes how I think about entity choice and owner salary.

What is the Section 179 limit now?

The One Big Beautiful Bill Act raised the Section 179 expensing limit to $2.5 million, with the phaseout threshold starting at $4 million of property placed in service, effective for property placed in service after December 31, 2024, and indexed for inflation after 2025. For nearly every small business I work with, that ceiling is high enough that Section 179 is no longer the binding constraint. The practical question becomes whether to use Section 179 or 100% bonus depreciation, and they behave differently when a business has a loss year.

Do I still have to send 1099s for payments under $600?

For 2025 payments, yes, the old $600 threshold still applies to the forms you file in early 2026. The One Big Beautiful Bill Act raised the Form 1099-NEC and 1099-MISC filing threshold from $600 to $2,000, but only for payments made after December 31, 2025. So the change first affects the 1099s you issue in early 2027 for the 2026 year. This catches people out, because the headline says the threshold went up while the return in front of you still runs on the old rule.

How does the no tax on tips deduction work for a business owner?

It is a deduction, not an exemption, and it is temporary. For tax years 2025 through 2028 a taxpayer can deduct up to $25,000 of qualified tips, phasing out once modified adjusted gross income passes $150,000 ($300,000 filing jointly). If you are self-employed, the deduction cannot exceed your net income from the business in which the tips were earned. Payroll tax still applies, and the tips still have to be reported. If you run a restaurant or a salon in Central Florida, the reporting burden did not go away, only part of the income tax on it.

What should a Florida small business owner actually do about this?

Three things. First, make sure your 2025 return actually claims the retroactive pieces, because a return prepared on pre-OBBBA assumptions will quietly overstate your tax. Second, revisit any equipment purchase you deferred, since 100% bonus depreciation is permanent again and the Section 179 ceiling is now $2.5 million. Third, if you are an S-Corp owner, revisit reasonable compensation, because a permanent QBI deduction changes the math on where salary should sit relative to distributions. Florida has no state income tax, so every one of these moves is a straight federal saving.

The One Big Beautiful Bill Act: What Changed for Small Business Owners

The One Big Beautiful Bill Act: What Changed for Small Business OwnersBy Timothy LeGendre, CPA · Florida License #AC62625 · Last reviewed 2026-08-10A Florida CPA breaks down what the One Big Beautiful Bill Act changed for small business owners: QBI, bonus depreciation, Section 179, tips, and 1099s.The One Big Beautiful Bill Act was signed in July 2025, and most of what it changed for small business owners is retroactive to January 1, 2025, so it lands on the return filed in 2026. The standard deduction for tax year 2025 rose to $15,750 for single filers, $31,500 for married filing jointly, and $23,625 for head of household, above the $15,000 / $30,000 / $22,500 the IRS had previously announced, and it is now permanent. The Section 199A qualified business income deduction, which had been scheduled to expire after 2025, is permanent at 20%, with wider phase-in ranges for specified service businesses and a minimum deduction for active business income. Bonus depreciation returned to 100% and is permanent for qualifying property placed in service after January 19, 2025, replacing the 40% step-down that applied under prior law. Section 179 expensing rose to a $2.5 million limit with the phaseout beginning at $4 million of property placed in service, effective for property placed in service after December 31, 2024. Section 179 cannot create a net operating loss while bonus depreciation can, so the choice between them matters in a heavy-purchase, light-income year. The business interest limitation reverts to an EBITDA basis from 2025, letting more interest through. Two new deductions are temporary and run for tax years 2025 through 2028: up to $25,000 of qualified tips, and up to $12,500 of qualified overtime ($25,000 for joint filers), both phasing out above $150,000 of modified adjusted gross income ($300,000 joint), with the self-employed tips deduction capped at net income from the business where the tips were earned. Neither exempts the income from payroll tax. The Form 1099-NEC and 1099-MISC filing threshold rose from $600 to $2,000, but only for payments made after December 31, 2025, so 1099s filed in early 2026 for 2025 payments still use the $600 threshold. The Form 1099-K threshold is permanently restored to $20,000 and 200 transactions. A higher reporting threshold does not make income tax-free: self-employment tax still applies once net earnings reach $400. Because Florida has no state income tax, every one of these changes is a federal-only effect.

Frequently asked questions

Does the One Big Beautiful Bill Act apply to my 2025 tax return?: Yes, most of it does. The law was signed in July 2025, but its core provisions are retroactive to January 1, 2025, so they apply to the return you file in 2026. That includes the higher standard deduction ($15,750 single, $31,500 married filing jointly, $23,625 head of household for tax year 2025), the permanent QBI deduction, and 100% bonus depreciation on qualifying property placed in service after January 19, 2025. A few pieces are not retroactive, most notably the new $2,000 Form 1099-NEC threshold, which does not start until payments made after December 31, 2025.
Is the 20% QBI deduction permanent now?: Yes. Section 199A was scheduled to expire after 2025, and the One Big Beautiful Bill Act made it permanent at 20%. It also widened the phase-in ranges for specified service businesses and added a minimum deduction for taxpayers with meaningful active business income. For a Florida S-Corp or LLC owner, this removes the single largest planning uncertainty of the last several years. You no longer have to structure around a deduction that might vanish, which changes how I think about entity choice and owner salary.
What is the Section 179 limit now?: The One Big Beautiful Bill Act raised the Section 179 expensing limit to $2.5 million, with the phaseout threshold starting at $4 million of property placed in service, effective for property placed in service after December 31, 2024, and indexed for inflation after 2025. For nearly every small business I work with, that ceiling is high enough that Section 179 is no longer the binding constraint. The practical question becomes whether to use Section 179 or 100% bonus depreciation, and they behave differently when a business has a loss year.
Do I still have to send 1099s for payments under $600?: For 2025 payments, yes, the old $600 threshold still applies to the forms you file in early 2026. The One Big Beautiful Bill Act raised the Form 1099-NEC and 1099-MISC filing threshold from $600 to $2,000, but only for payments made after December 31, 2025. So the change first affects the 1099s you issue in early 2027 for the 2026 year. This catches people out, because the headline says the threshold went up while the return in front of you still runs on the old rule.
How does the no tax on tips deduction work for a business owner?: It is a deduction, not an exemption, and it is temporary. For tax years 2025 through 2028 a taxpayer can deduct up to $25,000 of qualified tips, phasing out once modified adjusted gross income passes $150,000 ($300,000 filing jointly). If you are self-employed, the deduction cannot exceed your net income from the business in which the tips were earned. Payroll tax still applies, and the tips still have to be reported. If you run a restaurant or a salon in Central Florida, the reporting burden did not go away, only part of the income tax on it.
What should a Florida small business owner actually do about this?: Three things. First, make sure your 2025 return actually claims the retroactive pieces, because a return prepared on pre-OBBBA assumptions will quietly overstate your tax. Second, revisit any equipment purchase you deferred, since 100% bonus depreciation is permanent again and the Section 179 ceiling is now $2.5 million. Third, if you are an S-Corp owner, revisit reasonable compensation, because a permanent QBI deduction changes the math on where salary should sit relative to distributions. Florida has no state income tax, so every one of these moves is a straight federal saving.