The One Big Beautiful Bill Act: what changed for a business like yours.
A lot of what passed doesn’t touch a trades or small business owner in Texas. This covers what actually does: equipment expensing, the pass-through deduction, and a couple of quieter changes worth knowing about before year-end. This is general information, not advice for your specific return. The numbers here get tested against your actual facts in an engagement.
Reviewed · figures verified against IRS guidance including Notice 2026-11
Section 179 and bonus depreciation.
Section 179 expensing
The annual limit roughly doubled, from $1 million to $2.5 million, for property placed in service after December 31, 2024. The phase-out, where the deduction starts shrinking dollar-for-dollar, now begins at $4 million in purchases instead of $2.5 million. It disappears entirely past $6.5 million ($6,650,000 for 2026). Both figures index for inflation each year: $2,560,000 and $4,090,000 for 2026. Think of a trades or construction business buying trucks and equipment, or putting on a new roof or HVAC system. This is the difference between depreciating a purchase over years and writing off the whole thing the year you buy it.
Bonus depreciation
Under the old phase-down it was 40% for 2025, 20% for 2026, and gone by 2027. Instead, it’s been permanently set back to 100%. The date matters and has two parts, per IRS Notice 2026-11: the property must be both acquired and placed in service after January 19, 2025. Anything acquired under a contract signed before then stays on the old phase-down schedule even if it’s placed in service later. Paired with Section 179, most equipment-heavy purchases made after those dates can be fully expensed the year they’re placed in service.
The 20% deduction is permanent now.
Qualified Business Income (§199A)
This was set to expire at the end of 2025. It didn’t. The 20% deduction on qualifying pass-through income (S-corps, partnerships, sole proprietorships) is now permanent. Two changes are worth knowing. The phase-out range widened, from $50,000 to $75,000 above the threshold for single filers and from $100,000 to $150,000 for joint filers. More owners keep at least a partial deduction at higher incomes, especially in service businesses that used to lose it entirely. And starting in 2026, anyone with at least $1,000 of qualifying business income who materially participates gets a minimum $400 deduction, even if the standard calculation would produce less.
Smaller, but worth knowing.
1099 threshold jumps to $2,000
Effective 2026, the trigger for issuing a 1099-NEC or 1099-MISC to a contractor or vendor rises from $600 to $2,000 per payee. There are fewer forms to track for the occasional small vendor. Nothing changes for anyone already over that number.
Excess business loss limitation, permanent and recalculated
Two things changed here. The rule capping how much business loss can offset other income in a year was set to expire in 2028. That expiration is gone, and the rule is now permanent. The dollar threshold itself was also reset to a newer inflation baseline, and that reset makes it more restrictive going forward than the old trajectory would have been. The 2026 threshold works out to roughly $256,000 for single filers and $512,000 for joint filers, lower than where the prior calculation was headed. Losses above the threshold carry forward as a net operating loss.
R&D costs, deducted immediately again
Domestic research and development costs can be deducted the year they’re incurred instead of amortized over five years, and small businesses can elect to apply this retroactively to 2022–2024. It matters more to a business investing in product or process development than to a typical trades operation.
More interest is deductible
The calculation limiting how much business interest expense you can deduct now excludes depreciation, amortization, and depletion again. That is the older, more generous EBITDA-style test. For a business carrying debt on financed equipment, this generally means less of that interest gets disallowed.