Trump’s Big Beautiful Bill (officially the One Big Beautiful Bill Act) was signed into law on July 4, 2025. Many key provisions begin in 2025 and could mean major savings for small businesses—especially those in the trades. From expanded deductions to increased IRS oversight, here’s what you need to know now to stay compliant and save big.
Key Provisions in the Big Beautiful Bill for Small Businesses
23% QBI Deduction Permanent for S Corps and Contractors
What Changed: The Qualified Business Income (QBI) deduction increase to 23% and is now permanent.
What It Means for You: If you’re an S Corp, partnership, or sole proprietor, you’ll now deduct 23% of your qualified business income. That’s more money staying in your business—and a major win for contractors.
Section 179 Expands Under the Big Beautiful Bill—More Equipment Write-Offs for Trades
What Changed: The Section 179 deduction limit increased from $1.25M to $2.5M, with a phase-out beginning at $4M.
What It Means for You: You can now write off more equipment, trucks, software, and tools the year you buy them—improving cash flow and simplifying planning.
Big Beautiful Bill Restores 100% Bonus Depreciation Through 2029
What Changed: 100% bonus depreciation has been restored for purchases made after Jan 19, 2025, through 2029.
What It Means for You: Big purchases can now be deducted upfront, instead of depreciated over time. This helps reduce taxable income fast.
Loan Interest Deductions Get a Boost
What Changed: Businesses now calculate interest deductions using EBITDA (instead of EBIT).
What It Means for You: You can deduct more of your interest expense—especially if you’ve financed growth or equipment.
New Overtime Deduction in the Big Beautiful Bill Helps Retain Workers
What Changed: Workers earning under $150K/year can deduct up to $12,500 of their overtime pay through 2028.
What It Means for You: Your team keeps more of their hard-earned overtime pay. Good for morale, hiring, and retention.
Big Beautiful Bill Increases the Standard Deduction Through 2028
What Changed: Increased by $1,500 for single filers and $1,000 for joint filers. Taxpayers 65+ get an additional $4,000.
What It Means for You: Bigger personal tax breaks—without itemizing. That frees up more cash for your household or business.
SALT Deduction Cap Increased
What Changed: The SALT cap rose from $10,000 to $40,000 for those earning under $500K (through 2029).
What It Means for You: If you’re in a high-tax state like Massachusetts, this gives you major relief at tax time.
Child Tax Credit & Senior Deduction – Personal Tax Boosts
What Changed:
Child Tax Credit increased to $2,500/child
New $6,000 deduction for taxpayers age 65+
What It Means for You: More savings for your family—especially if you’re balancing business and home expenses.
IRS Oversight Is Tightening Under the Big Beautiful Bill
S Corp Owners Face More Scrutiny Under the Big Beautiful Bill
What Changed: The IRS will ramp up audits of S Corps and crack down on underpaid owner wages. Reasonable compensation is under the microscope.
What It Means for You: Low W-2/high distribution setups? Those days are numbered. Reevaluate owner comp and document your justification.
Big Beautiful Bill Requires S Corp Basis Tracking to Avoid Penalties
What Changed: Basis schedules are now required with every S Corp return.
What It Means for You: No more guesswork. Distributions and losses must align with tracked basis—or risk penalties and audits.
Partnership Compensation Rules
What Changed: Partnerships must report who’s receiving guaranteed payments, how much, and why.
What It Means for You: Compensation structures must be transparent and properly categorized. Misclassifications will face scrutiny.
Next Steps: How to Take Advantage of the Big Beautiful Bill’s Tax Breaks
The Big Beautiful Bill is now law—and packed with savings and new rules. Want to make sure your setup takes full advantage (and avoids penalties)?
Book a free call. We’ll review your current structure, spot missed opportunities, and build a strategy that actually works for your business.
Editor’s Note: The One Big Beautiful Bill Act was signed into law on July 4, 2025. This blog reflects confirmed provisions that affect small businesses and trade-based companies starting in 2025.
