What CFOs Need to Know About the One Big Beautiful Bill Act

By Mark Archer

On July 4, 2025, the One Big Beautiful Bill Act, better known as the OBBBA, was signed into law.  For financial leaders, this sweeping legislation constitutes the most consequential overhaul of U.S. tax policy in a decade. Navigating its implications effectively will be essential to steering secure financial strategy, managing compliance, and unlocking growth opportunities. 

Following is a recap of the bill and the key elements that CFO’s need to be aware of and take action on: 

Tax Certainty and Forecasting Stability 

One of OBBBA’s consequences is the elimination of uncertainty around tax rates and major deductions. Key provisions that were set to expire in 2025 are now permanent: 

• Individual rates from the Tax Cuts and Jobs Act (TCJA) are now extended and indexed for inflation. 

• Standard deductions remain at significantly boosted levels, with temporary enhancements through 2028. 

• The 21% flat corporate tax rate remains in place, aiding long-term planning.

This permanence restores clarity—critical for building multi-year forecasts and capital planning. 

Expensing, Depreciation, and Capital Deployment 

OBBBA reinstates powerful tools for capital investment: 

• 100% bonus depreciation is back and permanent, allowing businesses to immediately deduct the full cost of qualifying capital assets—like machinery, trucks, and technology—when placed in service after early 2025. 

• Section 179 limits are increased to $2.5 million in deduction and $4 million in threshold, indexed for inflation beginning in 2026. 

These changes enhance cash flow and accelerate ROI, a boon for CFOs evaluating major capital investments. 

Research & Development (R&D) and Interest Deductibility 

• OBBBA restores full expensing for domestic R&D costs, reversing the amortization requirement introduced in 2022. 

• Interest deductibility rules now allow calculation without subtracting depreciation, amortization, or depletion, effectively widening the deductible interest base. 

These adjustments will affect earnings and the recognition of deferred tax assets, especially for calendar-year companies, most of which must record the impacts in Q3. 

Small-Business & Pass-Through Relief 

CFOs of private and closely-held companies can leverage: 

• Qualified Small Business Stock exclusion, which is now permanent. 

• 20% Qualified Business Income (QBI) deduction under for pass-through entities, which is also permanent.

These provisions support tax-advantaged structures and succession planning. 

Social Policy Offsets & Clean Energy Rollbacks 

OBBBA includes measures to finance extended tax cuts: 

• Reforms to Medicaid, Supplemental Nutrition Assistance Program (SNAP), and student loan programs yield significant savings.  

• Clean energy tax credits from the Inflation Reduction Act are either phased out or partially reversed.

These socioeconomic changes may indirectly influence company-sponsored programs and ESG-related strategies. 

Fiscal Impact & Economic Context 

The law’s scale is immense: 

• Estimated to cost $3.4 trillion over 10 years, with added interest on debt pushing the total impact above $4 trillion. 

• Its result: a more regressive tax structure, with analysis suggesting the wealthiest gain disproportionately while low-income families may lose access to essential services.

CFOs should consider broader macroeconomic effects, such as interest rate pressures, that may affect capital markets and financing costs. 

Strategic Takeaways for CFOs 

1. Immediate Actions (2025)
   
   
   • Recognize the tax-law changes, including R&D expensing and interest deductibility, in the 2025 financials. 
   • Reassess deferred tax assets and liabilities under GAAP and ASC 740. 
   • Update cash flow forecasts to include benefits of bonus depreciation and altered effective tax rates.
     
2. Capital Allocation & CapEx Strategy 
   
   • Time capital expenditures strategically to exploit 100% bonus depreciation. 
   • Evaluate equipment and technology purchases now, while the immediate expensing advantage is active. 
   • Adjust depreciation schedules to reflect accelerated cost recovery.

    

3. Structuring & Entity-Level Tax Planning 
   • For private and pass-through businesses, ensure QBI and small-business stock planning is optimized. 
   • Review corporate vs. pass-through structuring, given the permanency of favorable provisions.
     

    

    

4. Scenario Modeling & Macroeconomic Sensitivity
   • Model scenarios, including potential interest rate hikes or inflation effects, prompted by escalating deficits. 
   • Anticipate policy shifts and maintain flexibility for future legislative adjustments.

    

    

5. Stakeholder Communication
   • Clearly communicate fiscal implications to boards, investors, and executive teams. 
   • Explain timing effects. For example, how expensing may boost near-term earnings, but also distort future periods.

    

    

6. Compliance & State Tax Coordination 
   • Monitor guidance and interpretations issued by Treasury, IRS, and relevant authorities. 
   • Review state tax treatments, particularly for bonus depreciation, QBI, and interest deductibility alignment.

Final Thoughts for CFOs and the OBBBA

For CFOs, the One Big Beautiful Bill Act is not just another piece of legislation; it’s a transformative event reshaping tax and investment landscapes. From restoring bonus depreciation and R&D incentives to offering permanence for small-business benefits, the Act provides powerful tools for disciplined financial leadership. 

But with change comes responsibility. CFOs must: 

• Accelerate internal modeling and 2025 reporting adjustments, 

• Seize opportunities in capital deployment and tax structuring, 

• Monitor evolving guidance, and 

• Communicate effectively across the leadership chain.

In navigating this new terrain, CFOs who move decisively, balancing opportunity with prudence, will position their organizations to thrive in the post-OBBBA era.