Published August 2026

This article is intended to provide perspective on how federal policy changes may impact your financial and tax strategy. These insights are not political statements from Ameriprise Financial. 

As a small business owner, it’s important to understand the new tax changes introduced by the One Big Beautiful Bill Act (OBBBA). This legislation brings a mix of opportunities and challenges, from enhanced tax credits and deductions to new compliance considerations that could impact your bottom line.  

While some provisions may benefit your business and employees, others could create more complex tax situations. An Ameriprise financial advisor can help you navigate this new regulatory landscape and determine how these changes will affect you. 

Here’s an overview of the top five changes affecting small business owners:

1. Qualified business income deduction is now permanent 

What changed? The qualified business income (QBI) deduction allows small business owners and self-employed individuals to deduct up to 20% of qualified business income from certain pass-through businesses and sole proprietorships, subject to eligibility rules and limitations. Originally set to expire at the end of 2025, this deduction is now permanent and has been expanded so that more taxpayers qualify. 

The details: 

• There's now a $400 minimum deduction for those with at least $1,000 in QBI from businesses in which they “materially participate” in business operations. This means that if a taxpayer earns $1,000 in QBI from a business they materially participate in, they will still receive a minimum deduction of $400, even though 20% of their QBI is less than that. 

• The thresholds at which the deduction begins to phase out have also increased, from $50,000 to $75,000 for single filers and from $100,000 to $150,000 for joint filers. These amounts will adjust for inflation beginning in 2026. 

What this may mean for you: If you’re eligible, work with your accountant to process this deduction and factor it into your broader tax strategy.   

2. Qualified small business stock gain exclusion is expanded 

What changed? Tax rules for the sale of qualified small business stock (QSBS) have changed, giving founders and early investors the flexibility to sell their shares within the first five years while still keeping valuable tax advantages. 

The details: In the past, you had to hold your shares for more than five years to potentially exclude some or all eligible gain from federal income tax, subject to detailed QSBS requirements and statutory limits. Now, for QSBS acquired after July 4, 2025, the tax benefits phase in over time. The longer you hold the QSBS, the more profits you can generally keep tax-free: 

• 50% exclusion after three years 

• 75% exclusion after four years 

• 100% exclusion after five years 

Additionally, the amount you can exclude from taxes on profits from one company has gone up from $10 million to $15 million (or if greater, 10x the adjusted basis of the stock). This limit will automatically adjust for inflation. The government also expanded the size limits for eligible companies, which means more businesses now qualify for these tax benefits. 

What this may mean for you: If you need access to capital, you now have the flexibility to sell your business shares earlier while still potentially excluding a portion of capital gains.  

3. Increased limits for expensing depreciable business assets 

What’s changed? Qualifying business owners can now deduct a greater portion of qualifying property, such as equipment, vehicles or other machinery, in the year it was purchased and placed in service. You no longer have to spread that deduction over the course of the asset’s lifespan. 

The details: 

• Generally, the 100% bonus depreciation has been permanently restored for qualified property acquired after Jan. 19, 2025 and subject to applicable placed in service and eligibility rules. For businesses that qualify for Section 179 expensing, the dollar limit for the expensing election was increased from $1 million to $2.5 million, and the phase-out amount increased from $2.5 million to $4 million, with an annual adjustment for inflation.  

• Taxpayers can claim the Section 179 deduction up to the new limit, with any remaining qualifying property eligible for 100% bonus depreciation. However, large first-year depreciation deductions may not always be ideal, as they could reduce future tax benefits or impact other deductions, like the QBI deduction. 

What this may mean for you: Businesses should carefully consider the timing of asset purchases and deductions. Large upfront deductions can lower taxes today but may reduce flexibility or potential benefits in future years. 

4. New deduction floor for charitable contributions made by corporations 

What’s changed? Corporations can now only claim a deduction for charitable contributions if the total of these contributions exceeds 1% of the corporation’s taxable income.  

The details:  

• This 1% floor may pose a challenge for small corporate businesses, as many donate less than 1% of their taxable income. For example, smaller contributions to local organizations or sponsorships for a high school team may no longer be deductible because they do not reach the 1% floor. 

• Charitable contribution deductions are limited to 10% of taxable income. Contributions above the applicable corporate charitable deduction limit may be eligible for carry-forward, subject to detailed rules. 

What this may mean for you: You may need to group your corporate giving into a single tax year to surpass the 1% threshold, which helps ensure your charitable acts remain tax-deductible.

5. New opportunities for employee benefits 

What changed? The OBBBA introduces several provisions that may help small businesses enhance employee benefits, helping to support their recruiting and retention efforts. 

The details: 

• Enhanced childcare credits: Beginning in 2026, eligible small businesses can claim larger credits for employer-provided childcare, with the maximum annual credit increasing from $150,000 to $600,000.  

• Trump Accounts: Employers may establish a program to contribute to Trump Accounts for employees or their dependent children. Employer contributions of up to $2,500 annually per employee are generally excluded from the employee's taxable income, subject to program requirements and overall account contribution limits. 

• New deduction for certain qualified tips and overtime: Through 2028, eligible employees may be able to deduct certain tip income and overtime pay from federal taxable income, potentially increasing the value of these forms of compensation. 

What this may mean for you: These provisions may provide new ways to support employees and their families while strengthening your overall benefits package. Review these opportunities with your tax professional and financial advisor to determine what fits your business. 

Make sense of the evolving regulatory environment 

An Ameriprise financial advisor can help you navigate changes introduced by new tax provisions like the OBBBA and help identify financial strategies that may be beneficial to you and your small business.