What Business Owners Need to Know About the 2025 Tax Overhaul

Trump’s Big Beautiful Bill just became law. What’s actually in it? On July 4th, the biggest tax overhaul since 2017 was signed, and it’s packed with big wins for business owners. 

100% bonus depreciation, a permanent 20% QBI deduction, tax-free tips and overtime, and brand-new deductions most people haven’t even heard of. Let’s break down the Big Beautiful Bill line by line so you know exactly what’s changing, what’s temporary, and how to use it to slash your tax bill before the window closes.

Why the Big Beautiful Bill Matters for Business Owners

The One Big Beautiful Bill (HR1), signed into law on July 4, is the most significant federal tax reform since 2017. While most headlines focused on the politics, the real value is in the fine print. This law introduces powerful tax-saving strategies, reopens critical deductions, and permanently locks in tax benefits for business owners and investors.

Why it matters: Most of these changes take effect in 2025. Planning now gives you the full advantage before the window closes.

Personal Tax Cuts You Need to Know

Several Trump-era tax provisions are now permanent, providing clarity and savings for individual filers.

• The 12 percent bracket is no longer reverting to 15 percent

• The standard deduction is locked in and inflation-adjusted ($31,500 for married couples in 2025)

• The Child Tax Credit is increasing to $2,200 per child starting in 2026

• Seniors aged 65 and older get a $6,000 bonus deduction from 2025 through 2028

SALT Cap Raised to $40,000

From 2025 to 2029, the SALT (State and Local Tax) deduction cap increases from $10,000 to $40,000 for those earning under $500,000. If you itemize, coordinate your property tax and estimated state tax payments to maximize the deduction each year before 2029.

Trump Accounts and Charitable Giving Changes

Trump Accounts are new tax-deferred savings vehicles parents can open in 2025.

• Contribute $1,000 at birth and up to $5,000 per year

• Funds can be used for education, job training, or a first home
  Charitable changes include:

• A deduction of $1,000 (single) or $2,000 (married) even if you don’t itemize

• A 0.5 percent AGI floor on charitable deductions for itemizers

More filers can now benefit from charitable giving, and families have a new savings vehicle for long-term investments in their children’s future. Consider bundling charitable contributions to exceed the AGI floor and prepare to open a Trump Account in 2025 when more guidance is issued.

Business Deductions: QBI, Bonus Depreciation, Section 179

Big wins for small business owners:

• The 20 percent Qualified Business Income (QBI) deduction is now permanent

• 100 percent Bonus Depreciation returns and is locked in

• Section 179 deduction limit increases to $2.5 million

• Research and development expenses can now be deducted immediately

You can write off more income and expenses in the year they occur, helping you lower your tax burden and reinvest faster. Time asset purchases, equipment upgrades, and business investments to qualify for these expanded deductions starting in 2025.

Estate Tax, Opportunity Zones, and Energy Credit Rollbacks

• The estate and gift tax exemption is permanently increased to $15 million for individuals and $30 million for married couples

• Opportunity Zones are now permanent, with expanded access for rural areas

• Several clean energy tax credits introduced under the Inflation Reduction Act are being reduced or repealed

Wealth transfer, business exits, and investment timing all depend on these thresholds. Review your estate and gifting plans. If you are selling a business or major asset, consider using Opportunity Zones before the remaining credits phase out.

Want to know how these new tax cuts apply to you personally? 

Book a free discovery call with our team and we’ll walk you through it.

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🎙 ABOUT THE PODCAST
The Small Business Tax Savings Podcast is your go-to resource for cutting-edge tax strategies to help entrepreneurs legally slash their tax bills. Hosted by Mike Jesowshek, CPA, this show breaks down complex tax topics into clear, no-fluff insights so you can keep more of your hard-earned money.

Transcript

Trump’s ‘One Big Beautiful Bill’ Just Changed Your Taxes Forever

[00:00:00] What if I told you that the biggest tax overhaul since 2017 just became law and hardly anyone is talking about what's really inside of it? On July 4th, while you are grilling burgers and watching fireworks, president Trump signed a bill that quietly rewrote your tax future. I'm talking due deductions for tips, zero tax on overtime, expanded credits in a permanent shift.

[00:00:20] In how small business owners plan, spend and grow. But here's the kicker. Buried in this monster bill are phase out traps and massive tax cutoffs that you need to know before your next financial move. Today we're gonna unpack everything line by line, deduction of by deduction. We're not talking politics, we're talking about taxes and your profit margin.

[00:00:38] So let's dive into it. Welcome to the Small Business Tax Savings Podcast, your ultimate guide to legally slashing your tax bill while building your wealth. Get ready to unlock the secrets of tax savings with your host, Mike Jeek, CPA.

[00:00:59] The bill that passed [00:01:00] was HR one, the one big beautiful Bill Act, and this was cleared by Senate, so remember the house kind of wrote their version of it, then it went to the Senate. The Senate changed some things and, and they passed it on July 1st, and then the, it went back to the house, and the house concurred on that bill on July 3rd.

[00:01:16] President Trump signed it into law on July 4th. And so we've been holding back and talking a lot about what has been, what has been being thrown back and forth because we wanted to wait until things were finalized. Once things are finalized, now we can actually begin to act. We can do, okay, we know what the law is now, how do we plan around it?

Extension of TCJA Provisions

[00:01:33] And now let's finalize now's the time of that. And the first things first is a lot of the tax cuts and Jobs Act items. From Trump's first presidency, a lot of those items from that tax bill have been extended or made permanent. So that's some good things to talk about there. And today we're gonna be talking about tax specific items.

[00:01:48] So this was a massive bill. There's a lot of different things covered. There's spending involved, there's cuts involved. And there's tax cuts involved. There's tax items involved. Today we're gonna be talking about the tax specifics. We're not gonna get into the [00:02:00] politics of all these other different items.

[00:02:01] We're talking specifically about what the tax pieces of this bill were. Now, I'm gonna be doing a high overview, talking about some of the major items as. I'm still uncovering a lot of this tax bill, so I'm gonna talk about some of the major items, the major things that you need to be thinking about that are part of this tax bill.

[00:02:17] But follow for more items fo follow me, like, subscribe, whatever it is. Follow me as we continue to deep dive and dig apart This tax bill, we're gonna be putting more videos, more content, more items up to make sure that you know everything that you need to know. About this tax bill. Now today I'm gonna break out the different pieces of the tax items of it into two pieces, a per uh, a personal side, and then the business side.

[00:02:40] So there's some personal items, and then there's some business related items. So let's start with personal. I. The first thing I wanna talk about is a permanent extension of the Tax Cuts and Jobs Act, individual tax rates and brackets. So these were brackets that were part of the Tax Cuts and Jobs Act from Trump's first presidency.

[00:02:56] These were set to expire at the end of 2025. That is [00:03:00] not happening. They've been permanently extended. So the big news is that the 12% tax bracket is not gonna spring back. To the 15% tax bracket, but rather it's gonna remain the same. So that's good news. The second piece is the standard deduction. You'll remember in the Tax Cuts and Jobs Act, the standard deduction increased significantly, but part of that is personal exemptions were taken away with this new tax bill.

Standard Deduction and Personal Exemptions

[00:03:22] The big, beautiful bill, the standard deduction from that tax cuts and job deck has been made permanent. As well as with adjustments for inflation. So these are set to expire, go back to the older rates, but instead it's gonna remain permanent and it's gonna adjust for inflation moving forward. So 2025, the standard deduction for married is gonna be 31,500 in 15,750 if you're single.

[00:03:43] Now with this, they also have the personal exemption has been completely eliminated permanently as well, which we would expect. That's part of the benefit of this increased standard deduction. So standard deduction. Remain remained, will will be permanently in place as well as the tax rates. [00:04:00] Those are good things.

Child Tax Credit Updates

[00:04:01] The next piece is the child tax credit. So starting in tax year 2026, the child tax credit is gonna increase to $2,200 from $2,000, and that's per child. So child tax credit got a slight increase. House and Senate kind of have different opinions on this, but the end result. $2,200 and that will increase for inflation moving forward as well.

[00:04:20] But that's 22,000 or 2,200 per child. That's a child tax credit increase. One of the big things that Trump ran on in his presidency is relief for, um, for, for, uh, social security. And so there is some senior tax relief that has been put into place. Now, this is for tax years, specifically for tax years, 2025 through 2028.

[00:04:41] So just for four years. Now this might extend it. They might extend, enhance this, whatever it might be. But this is a temporary relief for the next four years and it's temporary. It's gonna be a temporary $6,000 bonus deduction that's available for individuals aged 65 and older with incomes up to 75,000 for single or [00:05:00] 150,000.

[00:05:00] If you're married, once you hit that $150,000, if you're married, that deduction's gonna start to phase out. So again, a temporary $6,000 bonus deduction available for individuals aged 65 and older, and it will start to phase out once you hit income of 75,000 if you're single or $150,000 if you're married.

SALT Deduction Cap Increase

[00:05:17] Now let's talk about the state and local tax, the salt deduction. And if you've been following this bill at all, you know that this has been highly, highly contested, especially from those congressmen and those senators that are from high income states, they want this number really high. For those that are in low income states, they don't really care about this number, so this is a highly, highly contested area.

[00:05:36] And so what they did is they raised the salt deduction cap for tax year's 2025. Through 2029 for, so for the next five years, the salt deduction cap is raised from $10,000 to $40,000 for taxpayers earning less than $500,000. There's gonna be some phase out, there's gonna be some reduction of this. Once skied over that $500,000, after 2029, the cap reverts back to the $10,000.[00:06:00]

Extension of TCJA Provisions

[00:06:00] So you'll know that after tax cuts and jobs act, salt tax, Satan, local income taxes on an itemized deduction standpoint, were capped at $10,000. That 10,000 cap has moved to $40,000 for the next five years. So for those in high income states, this is, this is a big win for you. The next piece I wanna talk about is no tax on tips and overtime pay.

New Deductions for Tips and Overtime

[00:06:19] This was obviously part of a campaign promise. A lot of the, a lot of the pe uh, both Kamal Harris and Trump were running on this. Um, but this is a change. There's gonna be no tax on tips and overtime pay. We're gonna talk about the details on that. Now, this is for tax years, 2025. Through 2028. So that's for the next four years.

[00:06:35] Let's talk about tips. First, it's gonna allow EL eligible workers, think servers, bartenders to deduct up to $25,000 of reported cash tips from their federal and taxable income. Now you might be a business owner thinking, okay, I, I see what you're doing there. Let's start moving all of our income to, to tips.

[00:06:52] What they say is it's gotta be eligible workers. So think of an industry that is typical for tips. So if you're [00:07:00] in the, and if you're an accounting firm, if you're a financial advisor, you don't really get tips. If you all of a sudden aren't showing a bunch of tip income, it's probably not gonna make sense for you.

[00:07:08] So, you know, don't try to cheat the system here. This is for people that you know. Tips are, are accustom, and simply put the, what they put into place was, uh, a deduction up to $25,000 of the reported cash tips from your federal tax income. Next we have overtime pay. The change that they made was permits a, uh, a, a deduction of up to 12,500 for single or 25,000 if you're married of overtime, pay.

New Deductions for Tips and Overtime

[00:07:31] Again, great things. Now, both of these tips and overtime pay, the deduction's gonna start to phase out once you earn over $150,000 for single filers or $300,000 for joint filers. So just keep that phase out in mind. Are you tired of handing over massive checks to the IRS? The truth is, if you're a small business owner, you are probably overpaying in taxes, not because you're doing anything wrong, but because no one showed you how to plan the right way.

[00:07:57] But that changes. Now on July 15th, [00:08:00] I'm hosting a free webinar. I'll walk you through the exact strategies we use here at taxo to help business owners legally save 10,000 to $50,000 a year in taxes. This could completely change the way you handle taxes in your business. Again, it's totally free. You have nothing to lose.

Charitable Contribution Updates

[00:08:15] This could be the most profitable 60 minutes. You ever spend, go to www.taxsavingspodcast.com/webinar. That's tax savings podcast.com/webinar to save your seat. See you there. The next thing I wanna talk about that was a big change in, in the one big beautiful bill, was the charitable deduction. There is now gonna be a deduction for those that don't itemize.

Charitable Contribution Updates

[00:08:39] There's now gonna be a charitable deduction for non item items up to a thousand dollars if you're single, or $2,000 if you're married. So this is a cool thing that even if you're not itemizing, you can still get a charitable deduction for anything, any money that you're giving to charity. The other piece here that's important to talk about is this bill created a 0.5% floor on itemized deductions for charitable [00:09:00] contributions.

Auto Loan Interest Deduction

[00:09:00] Basically, this means that taxpayers can only deduct charitable contributions that exceed 0.5% of their adjusted gross income. So a little bit of A-A-A-A-A floor there that you have to be thinking about. Now let's talk about auto loan interest deduction. This was again. Something that Trump campaigned about.

Auto Loan Interest Deduction

[00:09:16] And, and I think that a lot of people believe it was a, a move to move to get people, uh, especially in some swing states to that are high in auto to to, to move to him. But this was, uh, this is gonna be for taxes 2025 through 2028, so four years. And this, this change permits individuals to deduct up to $10,000 per year in auto loan interest.

New Trump Savings Accounts

[00:09:37] For vehicles that were assembled in the us again, this is gonna phase out once you earn a hundred thousand dollars if you're an individual or single, or $200,000 if you're married. The one, the next item I wanna talk about is the Trump accounts. So this is starting in tax year 2025. Basically, this establishes tax deferred savings accounts known as Trump accounts, allowing parents to contribute a thousand dollars upon the birth of a child [00:10:00] in up to $5,000 annually.

Extension of TCJA Provisions

[00:10:02] Funds can be used for higher education, job training, or a home down payment. So we're gonna learn more about kind of what these really look like. Uh, but this is part of that, that change. So again, let's kind of walk through some of the high level personal related items we have. The permanent extension of the Tax Cuts and Jobs Act, that individual tax rates and brackets permanently extended.

Standard Deduction and Personal Exemptions

[00:10:21] This is great news. The standard deductions from the TCGA was made permanent and there were also increase for inflation. That's also good news. There's a child tax credit increase up to $2,200. Now there's senior tax relief. This is, this is good for four years, a temporary $6,000 bonus deduction. Uh, and there's phase outs there.

New Deductions for Tips and Overtime

[00:10:39] The salt tax, the Satan local income tax deduction. That has went up from 10,000 up to $40,000 cap. This is good news, especially for those in high income states. There is some provisions on no tax, on tips and overtime pay. Again, some phase outs to be considerate about, and then some changes to charitable deductions, as well as the addition of the auto loan interest deduction for the next four years.

[00:10:58] And then this idea of Trump [00:11:00] accounts, which we'll learn more about as, as this, uh, this bill starts to unfold. So those are some of the major changes on the personal side. Again, follow us some more. We're gonna continue to dig deep and, and pull these apart and really get into the nuts and bolts, but wanted to do an over level view so you had a high clear, a high level view of what the changes were in the one big B or football.

[00:11:19] So now let's dig into the business related changes, but real quick, if you're looking for tax strateg that you can actually implement. I built a software called ome. We don't just show you how to save on taxes, we help you turn those strategies into real dollar saved with clear step-by-step guidance and full implementation.

[00:11:35] So if you're serious about paying the least amount on taxes legally possible this year, click the link into the description and book a free discovery call with our team. Alright, now back to the business updates from the big Beautiful Bill. So this is the business side. Obviously if you're a business owner, these are gonna be really key things to to dig into.

Extension of TCJA Provisions

[00:11:50] The first one I'll talk about is the qualified business income deduction, the QBI deduction again. This was part of the Tax Cuts and Jobs Act from Trump's original presidency, the big tax bill that came through [00:12:00] in that piece. So the QBI deduction under Section one nine A is made permanent at the existing 20% rate.

[00:12:06] So that's good news for business owners. Again, this is where you can deduct up to 20% of your income. So if you're making a hundred thousand dollars a year, you immediately get a $20,000 deduction and you're only paying taxes on 80,000. From your pass through entity. So this is big news. Now, the house had initially proposed increase in this deduction to 23%, but the Senate did not adopt that change.

[00:12:25] And so what it finally landed on was just extending and making permanent the 20%, which has been in place for the last few years. So that's good news there. The C Corp rate remains changed, remains unchanged at 21%. There was talk about whether this would go down or up or change or adjust that remains the same.

Bonus Depreciation Restored

[00:12:41] So no big changes there. The biggest change and one that has been thought people have been following so closely and is super powerful. Not only business owners, but real estate investors is a hundred percent bonus depreciation. Big news, a hundred percent bonus depreciation returns. Permanently. This restores full expensive for qualified [00:13:00] assets, allowing businesses to deduct a hundred percent of the cost of equipment, software, certain capital improvements that you have in the year that it's placed in service.

[00:13:09] So if you remember, a lot of times when you buy an asset, you go buy a vehicle, you go buy, uh, a new piece of equipment. Let's say you buy a piece of equipment for a hundred thousand dollars without bonus depreciation, you don't get a hundred thousand dollars in the year. That you purchase that vehicle, you spread it out over multiple years in the form of depreciation.

[00:13:26] With bonus depreciation, it allows you to deduct a hundred percent of the cost upfront in the year that you placed it in service. So this is big news. A lot of people have been following it. Now, this is made effective for assets placed in service after January 19th, 2025. Again, this is a piece that if you're in real estate, if you're building buildings, if you have, uh, buildings for your business, this enhances.

[00:13:47] The use and the want and need to use cost segregation studies where we can break out parts of buildings and bonus appreciate parts of that in year one, which can pro provide massive losses that can be used to offset other income of [00:14:00] ours. A great planning tool, a great planning tool for businesses and especially.

[00:14:04] Real estate investors. The other piece I wanna talk about on the business side is section 1 79, expensing starting in 20.5. 2025. This the increase, it's gonna increase the maximum deduction to 2.5 million with a phase out beginning once total qualifying property place and service exceeds 4 million. So section 1 79 is, is kind of the the sister child to bonus appreciation.

Extension of TCJA Provisions

[00:14:25] That limit for section 1 79 bumped up to 2.5 million. Another item that that has been put into place on the business side is the research and development expensing, so it suspends. The requirement to capitalize and amortize research and development expenditures, allowing immediate expensing during this period, this was kind of an unintended consequence of the tax Cuts and Jobs act that was constantly put into bills.

QSBS Holding Period and Exclusion Updates

[00:14:48] Ever since the CCGA passed, they were constantly putting in this into bills to, to change it, to to clarify it, but it was never done. Now it has been done, and essentially it makes the r and d credit extremely [00:15:00] valuable again, especially for those that qualify. Next thing I wanna talk about is the QSBS. Uh, the ACT replaces the five-year holding period requirement for the exclusion of gain on the sale of qualified small business stock with a tiered exclusion based on the holding period.

QSBS Holding Period and Exclusion Updates

[00:15:15] So QSBS, this is where if you're looking to sell stock, uh, you, uh, have stock in a public company, there's potential where you can avoid gain on it. Um, this has been a big play, especially for those software, um, those, those in software businesses that are selling. Potential to, to, to avoid gain on, on really big, uh, payouts on, on those types of entities.

Opportunity Zones Made Permanent

[00:15:35] This just got put on steroids a little bit, so a lot, lot more flexibility here. We'll kind of deep dive into this one as well, but just know there's been changes to this and overall good changes to that. Finally, I wanna talk about opportunity zones. These are tax advantage investments for, uh, when you exit a business or have a potential gain that you wanna defer.

[00:15:54] The opportunity zone benefit was made permanent with modifications and special rules for rural areas. So this is a good [00:16:00] thing. Opportunity Zones was something that came into play with the TCGA and it's been made permanent and will continue to do. Again, this is a way that you can sometimes, um, avoid, uh, avoid defer gains on sales or exits that you might have had.

Estate and Gift Tax Threshold Changes

[00:16:14] But also be able to invest in areas that, that need investment, that need new areas. So that's, that's a cool thing. Other things that have been done, the estate tax, the estate tax has been permanently increased, um, to 15 million if you're single and 30 million from married couples beginning in 2026. So people were scared about this falling off this as well as ones that was set to expire.

Rollbacks to Green Energy Credits

[00:16:34] That's not gonna happen. So the sunset scare is over, it's gone. It's not gonna happen. And the state and lifetime gift tax exemption has now been. Permanently bumped to 15 million for single and 30 million for married to individuals. Now there's clear energy credits. Now this was kind of one of the big hits for it.

Rollbacks to Green Energy Credits

[00:16:52] Uh, energy credits were something that were put into place with the Inflation reduction Act to the IRAA few years ago where there was energy tax credits that were put into place. A lot of these. Are you getting pulled back? And there's different details of when they get pulled back, when you get to put things in, in service.

[00:17:06] So if you're thinking about investing in this energy piece, you might wanna start talking to some of your vendors, some of the people that you're working with, because there might be some changes, at least upcoming or maybe already that you want to consider. Maybe you're pushing up a project or, or, or something like, or, or considering a different type of project based on just solely the tax credit.

Bonus Depreciation Restored

[00:17:23] So again, let's do a high level review of the business side. Qualified business income. The section 1 9 8 deduction made permanent at the existing 20% tax rate. Again, this was set to fall off after 2025, made permanent. That's a good thing. The C corp rate remained the same. 21%, a hundred percent bonus depreciation returns.

[00:17:41] And has made permanent. This is great news for business owners. This is great news for real estate investors. Everyone loved this. And this was a big piece that we wanted to be, make sure was placed in the bill. Section 1 79 expensing. That's the, the maximum deduction per year is gonna increase at 2.5 million.

[00:17:56] There's gonna be some phase out around 4 million, uh, but this is [00:18:00] also, uh, good news. And then the r and d. Clause where there was some r and d items where you had to amortize, uh, r and d expenditures, um, that has been ref changed, that has been, uh, fixed because it was an unintended consequence from the original passing of the original bill, the TCGA bill that has been now fixed r and d credits back alive again.

QSBS Holding Period and Exclusion Updates

[00:18:20] They were always there, but now again, they're, they're very, they're, they're, they're more beneficial as well. And then there have been some changes to the QSBS deductions. Um, opportunity zones, uh, benefits made permanent with some modifications to it. This is all good news. Estate tax, 15 thou 15 million for single, 30 million for married capitals.

Rollbacks to Green Energy Credits

[00:18:39] Now, the big losers, some, some things that are lost specifically on the tax side is some of those energy credits, energy tax credits are being taken away. Now moving forward, this is an extremely large bill and I'm gonna continue to break this down and provide more context for the specifics and all the items I'm talking about today.

[00:18:56] I'm gonna break apart and talk about them specifically in some of the more [00:19:00] specific deals and, uh, details of each of those different pieces of the bill. But I wanted to do an overview. Here's some of the quick-hitting major items you want to think about. Follow me. Follow me, like, subscribe, do whatever it is to keep you updated as they are important, not just for your business, but also for your personal life.

[00:19:17] So there you have it. This was an intro to the key tax aspects of the Big Beautiful Bill. If this episode helped clarify some of the chaos. Hit that like button, subscribe for continued no-fluff tax strategy. As we continue to expand on the different aspects of this new bill, share this with someone who needs to know these new upcoming changes.

[00:19:37] Remember, big tax changes don't just affect billionaires. They impact every dollar you keep or lose. So stay sharp. Stay legal and as always, keep more of what's yours. And if you want help from our team of Tax Pros implementing this along with many other tax strategies, visit www.tax elm, that's T-A-X-E-L m.com, or click the link in the description for a free discovery call.

[00:19:58] We're helping people like you legally lower your tax bill. Every single day. Thanks for listening, and I'll see you on the next one. Thanks for tuning in to the Small Business Tax Savings Podcast. We hope today's episode sparked some brilliant ideas to help you save on taxes and grow your wealth. If you loved what you heard, hit the subscribe button and share the wealth with fellow entrepreneurs.

[00:20:23] For a treasure trove of tax saving resources, visit tax Savings podcast.com. There you'll find tools, guides, and all the info you need on reducing your taxes. Let's elevate your business to new heights together. Remember the insight shared here for educational purposes and not specific tax or legal advice.

[00:20:42] Always consult with a qualified professional for your unique. Situation. Until next time, keep thriving and saving.