How New Tax Rules Could Boost Your Business Interest Deductions

ARTICLE | January 20, 2026

Good news for businesses carrying debt: The One Big Beautiful Bill Act introduces a welcome change to how business interest deductions are calculated. Starting in 2025, the calculation of adjusted taxable income (ATI) once again includes add-backs for depreciation, amortization, and depletion—a shift that effectively increases the limit on deductible business interest for many companies. While roughly 98% of U.S. businesses already qualify for a small business exception (with the 2025 threshold set at $31 million in average annual gross receipts), those subject to the limitation will see meaningful relief. This change realigns ATI with the familiar EBITDA concept rather than EBIT, potentially unlocking greater tax savings.

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