Last updated: April 4, 2026
Ever feel like the tax code was written in a secret code specifically designed to keep you awake at 2 AM? You are not alone. The One Big Beautiful Bill (OBBB), signed into law in mid-2025, is a massive overhaul that actually brings some much-needed stability to your business finances.
Fast Answer: The One Big Beautiful Bill (OBBB) is a federal law that makes several small business tax breaks permanent, including 100% bonus depreciation and an increased $40,000 SALT deduction limit. This guide is for small business owners who want to understand how these 2026 changes impact their daily bookkeeping and year-end tax planning.
What is the One Big Beautiful Bill (OBBB)?
The One Big Beautiful Bill is essentially a "greatest hits" collection of business-friendly tax policies. Instead of these rules expiring every few years, the OBBB makes them a permanent part of the landscape. For you, this means more certainty when you decide to buy a new piece of equipment or hire your next employee.
Before this bill, many of the perks we loved from the 2017 tax reforms were scheduled to disappear. Now, we have a clear runway through 2026 and beyond. As a business owner, you can stop playing "tax chicken" with the government and actually plan your growth.
How does 100% bonus depreciation work in 2026?
One of the biggest wins in the OBBB is the permanent return of 100% bonus depreciation. If you buy a "big ticket" item for your business, like a delivery van, a heavy-duty printer, or specialized kitchen equipment, you don't have to wait years to write it off.
In the past, you might have had to spread that deduction over five or seven years. Under the new OBBB rules, you can deduct the full cost in the very first year you put it into service. This is a massive cash flow advantage. If you spend $50,000 on equipment today, you reduce your taxable income by $50,000 this year.
This makes the "buy vs. lease" decision much simpler. Many of our clients are choosing to buy outright to snag that immediate tax win.
What are the new SALT and QBI limits?
If you are running a business in a high-tax state like California, the SALT (State and Local Tax) deduction has probably been a sore spot. For years, it was capped at a measly $10,000.
The OBBB raised that cap to $40,000 through 2029. This is a huge relief for Los Angeles business owners who often hit that $10,000 limit just by paying their basic property and state income taxes.
Additionally, the Qualified Business Income (QBI) deduction has been boosted. If you operate as a pass-through entity (like an LLC or S-Corp), you might now be eligible for a 23% deduction on your business income, up from the previous 20%. It is essentially a "thank you" discount from the IRS for being a small business.
How do the new overtime and tip rules affect my payroll?
The OBBB introduced some very specific perks for your team that you need to track in your payroll system.
First, there is a new deduction for overtime pay. Individuals can exclude up to $12,500 of overtime income from their federal taxes. For you as the employer, this doesn't change what you pay them, but it makes the "extra hours" much more attractive to your staff.
Second, the "Tip Income Exclusion" is now in full swing. Service-oriented businesses like salons or cafes can see employees exclude up to $25,000 in tips from their taxable income.
Your job as the business owner is to ensure your bookkeeping reflects these categories accurately. If your payroll isn't set up to distinguish these specific types of pay, your team might miss out on these benefits.
What are the new 1099 limits and penalties for 2026?
This is where the "boring" part of bookkeeping becomes very expensive if you ignore it. The OBBB and subsequent 2026 regulations have tightened the screws on 1099 reporting.
The threshold for reporting payments to contractors has shifted, and the IRS is now using automated matching systems to catch missing forms. If you fail to file a 1099-NEC for a contractor you paid over the limit, the penalties have nearly doubled.
We recommend starting your 1099 bookkeeping checklist early. Don't wait until January 2027 to ask your graphic designer for their W-9. Get it before you send the first payment.
What is the new mandatory crypto reporting?
If your business accepts Bitcoin, Ethereum, or any other digital asset as payment, the OBBB has brought you into the spotlight. Starting in 2026, there are new mandatory reporting requirements for business-to-business crypto transactions.
The IRS now views these much like cash transactions over $10,000. You will likely need to file specific forms detailing the sender’s information and the value of the crypto at the moment of receipt.
This adds a layer of complexity to your bank reconciliations. You can't just mark it as "Sales." You need a record of the exchange rate and the wallet addresses involved.
Why does my bookkeeper need to care about OBBB?
You might be thinking: "Isn't this my CPA's job?"
While your CPA handles the final tax return, your bookkeeper is the one in the trenches every day. If your bookkeeper doesn't understand OBBB, they won't know to flag that $20,000 equipment purchase for bonus depreciation. They might not realize your crypto sales need extra documentation.
At Books LA, we focus on making sure your data is "tax-ready." This means when you hand your books to your CPA at the end of the year, all the OBBB-related categories are already sorted. You won't have to pay your CPA $300 an hour to clean up your "Miscellaneous" folder.
How to get started with OBBB compliance
The best way to handle these changes is to be proactive. Here is a quick checklist for this month:
- Review your asset list: Are you planning a big purchase? Check if it qualifies for the 100% bonus depreciation.
- Update your payroll settings: Ensure overtime and tips are categorized correctly to help your employees get their OBBB tax breaks.
- Audit your 1099s: Make sure you have W-9s for every vendor you've paid this year.
- Check your SALT exposure: Talk to your bookkeeper about how much you've paid in state and local taxes so far.
Want us to handle this? We can review your current setup and make sure you are capturing every OBBB benefit available. Book a short call with Books LA here.
Summary of OBBB Changes for 2026
| Feature | Old Rule | New OBBB Rule (2026) |
|---|---|---|
| Bonus Depreciation | Phasing out | Permanent 100% |
| SALT Deduction | $10,000 Cap | $40,000 Cap |
| QBI Deduction | 20% | 23% for many |
| 1099 Filing | Lower penalties | Higher penalties / Stricter limits |
| Crypto | Minimal reporting | Mandatory B2B reporting |
About Books LA
We are a Los Angeles-based bookkeeping firm dedicated to helping small businesses stay organized and compliant. We live and breathe QuickBooks Online (QBO) and Xero. Our team focuses on the day-to-day numbers so you can focus on growing your business. Whether you need a bookkeeping cleanup or monthly maintenance, we are here to support your journey.
Disclaimer: Books LA provides bookkeeping and payroll services. We do not provide income tax advice. The information in this post is for educational purposes. We work closely with CPAs to ensure your books meet tax requirements, and we always recommend confirming specific tax strategies with your CPA.
FAQ: Common Questions About the One Big Beautiful Bill
Does OBBB apply to my S-Corp?
Yes. The OBBB specifically targets pass-through entities like S-Corps, LLCs, and Sole Proprietorships. The QBI deduction increase to 23% is one of the primary benefits for S-Corp owners.
Is the 100% bonus depreciation only for new equipment?
Under OBBB, both new and "used to you" equipment typically qualify for bonus depreciation, as long as it is new to the business and put into service during the tax year.
What happens if I don't report crypto payments in 2026?
The IRS has increased its enforcement budget specifically for digital assets. Failing to report could lead to significant penalties and audits. It is best to use a sub-ledger or specialized software that syncs with your bookkeeping.
Can I still use the SALT deduction if I don't itemize?
The SALT deduction is generally part of itemized deductions on your personal return. However, some states have "SALT cap workarounds" for business owners (like the PTET in California) that your bookkeeper and CPA can help you navigate.
How much does it cost to have a bookkeeper manage these OBBB changes?
Most monthly bookkeeping packages include the categorization needed for OBBB compliance. If you need a one-time cleanup to catch up on 2025 or 2026 data, prices vary based on the volume of transactions.
Do I need to change my payroll provider because of the overtime rules?
Most major providers like Gusto or ADP are updating their systems for OBBB. Your main task is ensuring your bookkeeper maps those new payroll categories to the correct accounts in your general ledger.
Ready to stop stressing about the One Big Beautiful Bill and start using it to your advantage? Request a bookkeeping review from Books LA today.
