With the One Big Beautiful Bill Act (H.R. 1) signed and ready for implementation, family-owned businesses are digesting what the new bill means and how it will affect business.
Prior to President Trump signing the bill July 4, the Senate included several changes to tax provisions in the final, amended reconciliation bill compared to the initial version passed by the House. These changes included less stringent phaseouts of Inflation Reduction Act (IRA) clean energy tax credits and permanent business tax reforms, among others.
Notable tax provisions in the bill potentially affecting family businesses are:
TCJA Extension: The bill makes permanent or extends several expiring provisions from the 2017 Tax Cuts and Jobs Act (TCJA), including making permanent the individual income tax rates enacted by TCJA. The bill does not include a new bracket for high-income individuals.
Standard Deduction: The bill makes permanent TCJA’s increase to the standard deduction and temporarily increases the standard deduction for tax year 2025. The bill also permanently reduces the deduction for personal exemptions and miscellaneous itemized deductions that were temporarily limited by TCJA.
Section 199A Pass-Through Deduction: The bill makes permanent the 20% Section 199A qualified business income deduction, among several other changes.
Alternative Minimum Tax: The bill makes permanent TCJA’s increase in the alternative minimum tax (AMT) exemption, but reverts the exemption phaseout thresholds to 2018 levels. The reversion may result in additional individuals being subject to the AMT and therefore excluded from claiming the State and Local Tax (SALT) deduction.
Estate and Gift Tax: The bill permanently increases the estate and gift tax exemption level to $15 million, beginning after December 31, 2025, and indexes the increase to inflation.
Business Provisions: The bill includes several sought-after business provisions, as well as incentives for domestic manufacturing. It also permanently extends several business tax provisions.
Bonus Depreciation: The legislation permanently restores 100% bonus depreciation, effective January 20, 2025, allowing businesses to immediately deduct 100% of the cost of certain short-term investments and machinery from their taxable income in the first year rather than over fixed intervals (e.g., equipment interest).
Deductibility: The bill restores the EBITDA (earnings before interest, taxes, depreciation and amortization)-based limitation on the net business interest deduction, effective December 31, 2024.
R&D Expensing: The bill provides for immediate expensing of domestic research and development (R&D) expenditures effective after December 31, 2024. The bill maintains current capitalization and amortization requirements for foreign R&D expenditures.
Special Depreciation for Manufacturing Facilities: The final bill included a new 100% bonus depreciation allowance for certain manufacturing, production or refining facilities.
Advanced Manufacturing Investment Credit (Section 48D): The bill increases the Section 48D credit rate to 35% (from 25% under current law) effective for property placed in service after December 31, 2025. The legislation, it should be noted, also increases the statutory debt limit by $5 trillion. In comparison, the initial House-passed bill included a $4 trillion increase.
New Survey: Rising Gen Making Noise
College students pondering their futures in family businesses were recently asked some big questions about legacy, succession and revenue generation, as well as about how to communicate with family members in charge. These questions and concerns all come from a new survey conducted through a partnership between the Smith Family Business Initiative at Cornell University, Family Enterprise USA and The Roberts Group.
In “The 2025 Rising Gen Survey,” some 164 current students shared their perspectives and concerns as they relate to their family businesses. The students, all of whom are or were enrolled in family business or entrepreneurship courses, were asked what was most important to them as it related to their family business. The students are currently or were recently enrolled in these courses either because their family owns a business, they’re interested in starting a business or they’re curious about family businesses in general. Some 63% are already working for or are involved with their family-owned businesses, the study found.
A large percentage of the students (81%) represented the second or third generation of the family business, with 24% being in construction and real estate, 15% in manufacturing, 12% in agriculture and 10% in retail. Some students have skin in the game, too — at least for the moment — but most do not. The survey found nearly 34% of students have an ownership stake in their family business, while 46% said they did not and 20% were unsure.
Not surprisingly, communication within the family, or lack thereof, was a top issue, but two other top issues were legacy and succession. The survey found, for the second straight year, the word “legacy,” with its multiple connotations, was the word most associated with family business, while “succession” was also top of mind among the students.
But consistent with the 2024 results, one the biggest ongoing fears students have is around their ability to generate revenue. This ranks as the primary worry among respondents, with 17.4% of students citing it as their main concern — a similar percentage to last year’s results.
Other top concerns among NextGens are remaining competitive and succession planning, both of which were cited by 12% of respondents, though last year these categories were higher, at roughly 17%. This is a natural expression: the fear of letting down parents and family members, and of failing.
It is also an expression of the fear of the unknown. After all, the survey also found 60% of the respondents’ family businesses have neither a succession plan nor a board of directors, and nearly 70% do not have a family constitution.
The solution to these anxieties resides in improved family communication and better education on the basics of the business. Besides the revenue generation worries, the NextGens surveyed noted concerns about sustainability, ownership structures and their own qualifications to work in the family business.
Perhaps the most revealing insights came when the survey asked students the open-ended question of what they would ask their parents and grandparents about the family business “if they had the courage.”
Some repondents’ questions were tied to operations, such as, “How did our business start?” and “Why can’t we shift toward more professional operations?” Yet, certain responses exposed topics families often have difficulty engaging with, such as wealth, expectations and family relationships. Among the other tough questions students said they’d like to ask current gens were: “What is our net worth?”, “Is it worth continuing this business?”, “Do you want my other siblings in the business?” and “Are my skills strong enough?”
With nearly 50% of these students indicating their family does not have a family council and 45% stating they have no family constitution, employment policy or formal board, it’s no wonder there is confusion about ownership and responsibilities. Conversations — often around the dinner table — on these subjects are good places to start to increase transparency and empower the rising gen to take charge into the future.
‘Legacy & Longevity’ Spotlight for Sept 17 Caucus
Family-owned business leaders will gather on Capitol Hill on Sept. 17, 2025, for the third meeting this year with members of the Congressional Family Business Caucus.
The theme for this last meeting of 2025, apropos given the findings in the “Rising Gen” study, is “Legacy & Longevity – How Congress Can Support the Next Generation of Family Businesses.”
At the meeting, family business leaders from around the country will share their personal stories about the challenges of maintaining legacy and longevity and how both are affected by legislation.
The breakfast and lunch gathering begins at 8 a.m. in the Capital Building’s Visitor Center and will start with a panel discussion in which family business leaders are set to converse on managing generational transitions. In addition, the panelists will discuss the tax and economic challenges involved with those transitions, and how Congress — and members of the Caucus — can help with this process.
This will be followed by a legislative and political update by experts from law firms Brownstein and Squire Patton Boggs; a “What Now?” presentation from political and communications consultant Dr. Frank Luntz and a presentation on “Family Business Tax Concerns” by Bobby Stover, Americas Family Enterprise and family office leader for EY.
Following these presentations, breakout groups will visit directly with Congress members and their staffs in their private offices, ensuring the voice of the family business owner is heard on Capitol Hill. These meetings make a huge difference in guiding policy that helps the number one private employer in the country: family-owned businesses.