Breaking Down the 2025 “One Big Beautiful Bill Act”: What Small Business Owners and Individuals Need to Know
Big tax changes have arrived. On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” into law—a wide-reaching update to federal tax rules for businesses and individuals. Here’s what you need to know, simplified.
Key Highlights for Small Businesses
1. 100% Bonus Depreciation Returns
Businesses can once again fully expense eligible property and equipment purchases, starting right away. If you buy it, you can deduct the whole cost immediately.
2. Section 179 Expensing Limit Raised
The amount businesses can instantly deduct for new or used equipment (Section 179) is now $2.5 million.
3. R&Costs: Immediate Expensing
Spending money on research and development? You can now expense those costs
immediately—no more stretching deductions out over years.
4. QBI Deduction is Here to Stay
The 20% pass-through deduction (for S Corps, LLCs, partnerships, and sole props) is permanent.
5. Interest Deduction Gets Easier
Limits on deducting business interest go back to the old rule—up to 30% of EBITDA (earnings before interest, taxes, depreciation, and amortization).
6. Opportunity Zones Get a Reboot
Qualified Opportunity Zones are renewed, giving businesses and investors another tax-advantaged growth option.
What’s Changing for Individuals
1. Tax Rates & Standard Deduction
● The current seven tax rates and brackets are now permanent, with some brackets frozen.
● The standard deduction is $15,700 for singles and $31,500 for joint filers (adjusted for inflation).
2. SALT Cap Rises Temporarily
You can now deduct up to $40,000 of state and local taxes through 2029—then the cap drops back to $10,000.
3. Child Tax Credit Increase
Each child now qualifies for up to $2,200 in credits, with $1,700 refundable. High earners will see a phase-out.
4. No Tax on Tips or Overtime (Limited Time)
Tips and overtime pay won’t be taxed for many workers (through 2028, with income caps).
5. Auto Loan Interest Deduction (For U.S.-Built Cars)
You can deduct interest on loans for new American-made vehicles (2025–2028).
6. New Senior Deduction
Retirees can now deduct up to $6,000 in Social Security income ($12,000 for joint filers), with an income phaseout.
7. Estate & Gift Tax Exemption Rises
The exemption jumps to $15 million, starting January 2026—good news for families planning their legacies.
Other Notables
● Some clean energy and pandemic relief credits are ending or getting phased out.
● Several business-friendly perks (like permanent paid family & medical leave credits and expanded disaster relief) are now locked in.
Bottom Line
The 2025 “One Big Beautiful Bill Act” delivers a lot of good news for business owners and families. As always, there are some fine print items and income limits tucked in. If you want to dive deeper or need tailored advice, our team at Elite Tax Strategies is here to help.
