How Small Businesses Benefit From the ‘One Big Beautiful Bill’

“In the areas where it made things permanent, it’s about having certainty for tax planning over a longer period of time, as opposed to worrying that some advantages might go away,” says Gerald Youngblood, CDW’s senior vice president of small business.

The tax changes arrive as Youngblood sees three major technology trends that are driving small business spending this year: reinvention around artificial intelligence, optimizing existing infrastructure to leverage data into actionable business insights, and resilience through improved cybersecurity and business continuity planning.

By reducing taxes, the new law frees up funds for small companies to invest in those areas and grow their businesses.

“Instead of spanning those investments over a longer period of time, you can make bigger bets earlier and start to reap the benefits of that reinvention sooner, which is impactful for small businesses,” Youngblood says.

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Small Business Tax Benefits in the One Big Beautiful Bill

The OBBBA provides numerous tax cuts, deductions and changes that affect small businesses. Here’s a look at four key benefits:

1. Section 179: The deduction allows business owners to write off the entire cost of technology, equipment, furniture and vehicles in the purchase year rather than over normal depreciation.

The new law increases the deduction from $1.22 million to $2.5 million annually. Section 179 limits how much companies can spend on equipment to qualify for the full deduction. For 2025, the spending limit rises from $3.05 million to $4 million. Every dollar spent above the limit must be subtracted from the deduction.

Technology that qualifies for the deduction includes computers, servers, networking equipment and off-the-shelf software.

“You are able to take the whole deduction in year one, so you’re paying less taxes today and keep more money in your pocket,” says Chris Barrett, owner and managing director of Midwest CPA in Janesville, Wis. “You’re able to reinvest those savings and hopefully grow your company quicker.”

2. Bonus depreciation: This deduction also allows businesses to deduct new and used technology, equipment and other property. Before the new law, bonus depreciation was being phased out by 20% annually, dropping to 40% in 2025. The new law restores 100% bonus depreciation permanently, enabling businesses to immediately deduct the full cost of qualifying purchases, beginning with purchases after Jan. 19, 2025.

Some use Section 179 and bonus depreciation together. If they reach the Section 179 spending limit, they can write off the remaining purchases through bonus depreciation.

Barrett recommends making strategic investment decisions first, then optimizing tax benefits. 

“Don’t go buy something just so you can get a deduction, because you end up spending $1 to save 30 cents,” he says. “It’s really important that what you’re purchasing is actually going to help you grow your business.”

Barrett advises consulting with accountants on timing these tax write-offs. Instead of taking the full deduction immediately, businesses may want to spread deductions over multiple years if current tax liability is low and they expect higher future profits, he says. 

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3. R&D tax credit. The OBBBA permanently restores immediate expensing for domestic R&D, which reduces taxable income, Barrett says. Previously, R&D expenses had to be amortized over five years.

“There are a lot of ways this can be applied,” he says. “If you are a manufacturer building new technology or an e-commerce company or Software as a Service business developing new products, this is something that should be considered.”

4. Qualified Business Income Deduction. The new tax law makes permanent the Section 199A qualified business income deduction, which provides a 20% deduction for pass-through entities including partnerships, S corporations and sole proprietorships.

One Big Beautiful Bill’s Economic Impact on Small Businesses

For the smallest businesses, the increased Section 179 deduction may have limited direct impact, as most don’t reach the spending threshold. However, small businesses can still benefit from the economic ripple effects created when larger businesses accelerate their tech and other equipment investments.

As large businesses in sectors such as manufacturing and energy use the expanded tax benefits to make bigger equipment purchases, they increase demand for professional services and subcontracting support that many small businesses provide. This creates more revenue opportunities for the smaller companies, enabling them to reinvest in their own operations through new technology or workforce expansion, Youngblood says.

“As those investments from larger businesses hit, you will see smaller businesses benefit,” he says. “Anyone who’s providing services or is connected to these bigger businesses can see a benefit because there’s more build-out. There’s more hiring.”

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While expanded tax benefits enable small businesses to make larger upfront tech purchases, Youngblood says an accelerated timeline can make investment planning more complex. Instead of spreading major tech decisions across multiple budget cycles, they may do it more immediately, requiring more strategic thinking about sequencing and priorities.

Business owners should consult with their accountants to maximize the tax advantages in the OBBBA, but CDW’s team of experts can help small businesses plan out their purchases, whether it’s professional services for AI projects, security services or hybrid cloud infrastructure decisions. 

“Being able to make investments sooner almost makes it more complex, because you haven’t spread it out over time,” Youngblood says. “That’s where CDW can have a major impact helping to navigate those bets on your future.”