Washington, D.C. — The tax provisions within President Trump's sweeping "One Big Beautiful Bill" are poised to deliver significant financial benefits to Main Street businesses in 2026, with several key measures offering 100% deductions on critical expenses like equipment purchases and domestic research. While the bill resurrects and expands many favorable policies, its complexity means small business owners may need to consult advisors to fully capitalize on the savings.

A central pillar of the legislation is the 100% immediate expensing for equipment and machinery purchased after January 20, 2025—a dramatic increase from the previous 40% cap. "This is a huge jump," noted one tax expert, advising businesses to review recent purchases for potential deductions. Another provision allows a 100% deduction on up to $2.5 million for items new to the business, even if not brand new, offering substantial flexibility for operational upgrades.

R&D Relief and Enhanced Interest Deductions

A major victory for startups and tech-focused small businesses is the full restoration of immediate deductions for domestic research and development (R&D) costs. This reverses a 2017 change that forced costly amortization, a burden particularly heavy on small innovators. "This is a huge relief for a lot of taxpayers," said a tax director, noting that businesses can also seek credits for past R&D expenses.

Additionally, the bill revives a more generous EBITDA-based limitation for interest deductions, a crucial benefit for growing businesses that rely on debt financing. "It allows them to deduct that interest and reinvest the savings into the business to keep growing," explained a policy advocate, highlighting the measure's growth-oriented design within a supportive competitive ecosystem.

Permanent Deductions and Targeted Credits

The legislation also makes the popular 20% Qualified Business Income (QBI) deduction permanent and expands eligibility for higher-income owners. Other targeted benefits include a "no tax on tips" deduction of up to $25,000 for service businesses and an enhanced tax credit for employer-provided child care, which is particularly generous for smaller firms.

For business owners, the bill represents a substantial strategic financial pivot, offering tools to reduce taxable income and accelerate investment. However, experts caution that navigating the specifics—such as spending limits, income thresholds, and pending IRS guidance—requires careful planning. Successfully leveraging these provisions will be a key high-stakes financial maneuver for small businesses aiming to maximize their after-tax capital in the coming year.