Stride Live: The Business Breakdown of the One Big Beautiful Bill with Morgan Holmes
What does the “One Big Beautiful Bill” mean for your business? For Managed Service Providers (MSPs) and other service-based businesses, it means opportunity. It means clarity. And most importantly—it means cash flow.
In this Stride Live session, Morgan F. Holmes, CPA and owner of Stride Services, breaks down the most impactful provisions of the recently passed “One Big Beautiful Bill,” a sweeping legislative update that extends, expands, and redefines many of the tax policies that business owners have relied on over the last several years.
This isn’t theoretical. These are concrete changes with real, immediate implications—especially for small and midsize businesses looking to make smart financial moves in 2025 and beyond.
Key Takeaways
1. QBI Deduction Extended—The 20% Benefit Lives On
One of the biggest wins from the new legislation is the extension of the Qualified Business Income (QBI) deduction. Originally set to expire at the end of 2025 with the sunset of the Tax Cuts and Jobs Act, this 20% deduction for pass-through income is now extended—removing a major source of uncertainty for S corps and other small business owners.
2. Bonus Depreciation Back at 100%
In a major reversal, bonus depreciation is restored to 100% for qualifying assets placed in service after January 19, 2025. That’s up from the previous 40% cap. If your MSP is planning major equipment purchases—like vehicles, servers, or infrastructure—this is a powerful opportunity to deduct the full amount in year one.
Tip: Don’t buy just to get a deduction. As Morgan emphasized, “If you don’t need it, don’t buy it.” Good tax planning doesn’t sacrifice cash flow for write-offs.
3. Section 179 Expanded—Greater Flexibility in Expense Planning
Section 179 has long been a go-to for MSPs needing targeted control over how much of an asset’s cost to deduct. Now, thanks to the bill, the deduction limit has nearly doubled. Unlike bonus depreciation, which is mandatory unless you opt out, Section 179 allows for strategic election of the exact amount you want to deduct.
Why it matters: If you want to manage your taxable income to hit a specific threshold—say, to qualify for a credit or avoid an overpayment—Section 179 gives you the dials to fine-tune.
4. Big Win for R&D: Domestic R&E Expenses Can Be Deducted Again
Morgan didn’t hide his excitement here. The bill reverses an unpopular change from 2022 that forced businesses to capitalize and amortize R&D expenses over 5–15 years. Now, U.S.-based research and experimentation (R&E) expenses can be deducted in the year they’re incurred.
Even better? If your business has been capitalizing these costs since 2022, and your average gross receipts are under $31 million, you may be eligible to amend past returns and claim refunds.
Key Insight: This is a game-changer for software developers, tech-forward MSPs, and any business innovating domestically.
5. Other Notable Business-Friendly Updates
While some provisions aren’t as widely applicable, they’re still worth noting:
- Office Snacks and Coffee: These are now back to being 100% deductible, reversing the 50% cap imposed by the Tax Cuts and Jobs Act.
- 1099 Reporting Threshold Raised: The threshold for issuing 1099s increases from $600 to $2,000 starting in 2026, adjusted for inflation.
- Business Interest Deduction Relief: For businesses previously limited by depreciation addbacks, those addbacks have been removed—allowing for more interest to be deducted.
- Qualified Small Business Stock (QSBS): Holding periods for tax-free gains are more flexible—3 or 4 years can now yield partial exclusions (50% or 75%), compared to the previous five-year requirement for 100%.
6. What About Charitable Contributions?
It’s a common misconception among MSPs that charitable contributions made through the business are fully deductible on the business return. Morgan clarified that, for most MSPs operating as S Corps, these contributions flow through to the owner’s personal return as separately stated items. The deduction’s actual impact is personal, not corporate.
7. Mid-Year Strategy: Why Now Matters
It’s mid-2025, and the bill’s retroactive provisions—like the bonus depreciation change backdated to January 20—mean business owners must act now to maximize benefits.
Morgan’s advice: Review your Q1 and Q2 purchases. If you’ve already made large fixed asset investments or paid high estimated taxes, you may be in a position to skip or reduce your Q3 tax payment.
Tip: Better planning now equals more cash on hand later. Don’t wait until year-end to adjust.
8. Plan Now or Pay Later—Literally
This conversation underscored the central truth of all great tax strategy: It’s proactive. Morgan emphasized that many business owners wait until January to “do taxes,” but by then, it’s too late to change the outcomes.
From contributing to a 401(k) (yes, you can deduct up to $70,000 as an owner) to adjusting your quarterly estimates, real impact happens during the year—not after.
Final Thoughts
The “One Big Beautiful Bill” is more than just a tax update—it’s a wake-up call. For MSPs and other service-based businesses, it presents a critical moment to take stock, reevaluate your tax position, and embrace proactive planning.
Don’t wait until tax season. By then, most of your options will be off the table. Talk to your advisor, review your asset strategy, and look closely at your QBI, R&E expenses, and estimated tax payments.
Your future self—and your cash flow—will thank you.
Want to watch the full conversation?
Watch the full webinar on LinkedIn.
About Stride Services
Stride Services is a comprehensive financial partner for MSPs, providing outsourced bookkeeping, tax, and advisory services designed to improve clarity, support confident decision-making, and eliminate financial fire drills. Whether you need monthly accounting support or proactive tax guidance, Stride helps you stay on track and plan for what’s next.
To learn more, visit www.stride.services.
Show Notes + Transcript:
Casey Seaborn: Email
LinkedIn: Casey Seaborn
Morgan Holmes: Email
LinkedIn: Morgan Holmes
