The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, is the largest change to U.S. tax law since the 2017 Tax Cuts and Jobs Act (TCJA). RSM's Washington National Tax team takes a close look at the legislation and how it affects the middle market.
Key OBBBA tax changes at a glance
OBBBA permanently extended many individual and business tax provisions from TCJA, while introducing rules that reshape planning for the middle market. Major OBBBA tax changes include:
- Tax treatment of domestic research and development (R&D) expenditures
- Bonus depreciation
- Limitation on expensing business interest
- International tax provisions
- State and local tax deduction cap
- Individual rates and the standard deduction
Business and energy tax provisions
For middle market companies, OBBBA significantly modified business tax provisions designed to encourage domestic investment, including the restoration of 100% bonus depreciation, immediate expensing of domestic research costs and a more favorable interest expense limitation.
The legislation also modified clean energy and manufacturing incentives, accelerating the phaseout of several Inflation Reduction Act credits while preserving select opportunities for taxpayers that act within the new timelines.
Eligibility and phaseouts
Many of the most valuable OBBBA tax benefits are governed by income thresholds, transition dates and phaseout schedules that vary by provision and entity type. Understanding which incentives apply to your business or household—and when eligibility windows open or close—is essential to capturing the full value of the new law. RSM's tax professionals can help you model the impact and prioritize planning opportunities.
These insights reflect the final legislation at the time of writing and are updated as new information is revealed.
