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David P. McCabe,
WMCP®, ChFC®, CLU®
Financial Planner
Nathaniel D. High,
CFP®, RICP®
Financial Planner
Nicholas J. Over, CFP®
Financial Planner
Sara E. Martin
Operations Manager
Molly R. Kelsh
Client Service Specialist
Centuria Financial Group
2333 Baltimore Blvd Suite B
Finksburg, MD 21048
Phone: 443-952-7232
January/February 2026
OBBBA and Businesses
The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, introduces significant tax and financial changes that reshape the landscape for small business owners. This legislation offers opportunities for growth but also presents challenges, requiring strategic planning to maximize benefits.
Qualified Business Income (QBI)
A cornerstone of the OBBBA is the permanent extension of the 20% Qualified Business Income (QBI) deduction for pass-through entities like sole proprietorships, partnerships, and LLCs. With increased income phase-out thresholds ($75,000 for single filers, $150,000 for joint) and a $400 minimum deduction for businesses earning at least $1,000 in QBI, this provision enhances tax savings, provided 75% of gross receipts come from qualifying activities.Expensing
The act also boosts investment through enhanced Section 179 expensing, raising the deduction limit to $2.5 million with a $4 million phase-out, and reinstating 100% bonus depreciation for assets acquired after January 19, 2025. These measures enable small businesses to deduct equipment and property costs upfront, improving cash flow for expansion.Research-focused businesses benefit from immediate expensing of domestic Research & Experimental costs starting in 2025, with retroactive relief for 2022–2024 for firms with under $31 million in receipts. The state and local tax (SALT) deduction cap increases to $40,000 through 2029, aiding owners in hightax states, while pass-through entities can leverage Pass-Through Entity Taxes to bypass individual caps.
Compliance
Compliance burdens ease with simplified reporting. The 1099-MISC and 1099-NEC threshold rises to $2,000 starting in 2026, and third-party payment reporting reverts to a $20,000/200-transaction threshold, reducing administrative tasks for small businesses and gig workers.Qualified Small Business Stock
The OBBBA enhances Qualified Small Business Stock (QSBS) exclusions (50% at three years, 100% at five) and offers credits for employerprovided childcare (up to $600,000 for small businesses) and paid family leave, benefiting service industries. However, challenges include stricter 1099 compliance, the rollback of clean energy credits, and potential cost increases from tariffs, which could strain supply chains. Social program cuts may also raise healthcare costs.Small business owners should consult tax professionals to navigate the OBBBA's complexities, optimize tax benefits, and prepare for economic shifts.
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David P. McCabe, Nathaniel D. High, and Nicholas J. Over are Financial Planners with, and offer securities and investment advisory service through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
LPLE and LPL Financial are not affiliated with Centuria Financial Group.
This newsletter is general educational information provided by a Prudential Financial Professional and is not intended to market or sell any specific products and services, but rather provide general information about the subject matter covered only.
Centuria Financial Group and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.