I don’t know about you, but there’s something about July 4th that gets me into the entrepreneurial spirit. You fire up the grill, wave off work for a day, and you’re reminded of WHY you started a business in the first place: freedom. 

And while you’re busy prepping your cookout menu and checking the propane, Washington’s busy too (and not just with party planning). 

Over the weekend, the U.S. Senate clocked 16 hours reading through President Trump’s tax proposal on Saturday, then debated it for another 10 hours on Sunday. And, as of this writing (Monday), they’re voting on it with the goal of pushing it across the finish line before July 4th.

Buried in this proposal are some serious changes that could affect how you handle everything in your business, from employee compensation to capital investments. We’re talking things like 100 percent bonus depreciation, tax-free tips for employees in certain industries, and extended pass-through deductions that could ease the burden on your business income.

In other words, it’s got the potential to put more money back in your pocket.

But here’s the thing: those benefits only matter if you’re positioned to take advantage of them.

That means thinking ahead. If this bill passes, there may be moves to make in Q3 and Q4 – purchases to time right, payroll to structure, planning conversations to have (and I’m here for all of that: calendly.com/eco-tax-free-consultation/meeting ).

So, let’s take a moment to unpack what this “One Big Beautiful Bill” might mean for your business – and how to get ready for whatever version of it becomes law.

What the “One Big Beautiful Bill” Means for Your Business 

“Change is made of choices, and choices are made of character.” —Amanda Gorman

 

Quick Answer: What the “One Big Beautiful Bill” Means for Your Business

• For pass-through entities: The 20 percent QBI deduction becomes permanent with higher income thresholds, potentially saving thousands annually if you own an LLC, S-Corp, or sole proprietorship.
   
• Equipment purchases: 100 percent bonus depreciation becomes permanent, letting you write off the full cost of qualifying business equipment in year one.
   
• R&D expenses: Businesses can fully expense domestic R&D costs immediately (retroactive to 2022 for smaller businesses), potentially allowing amended returns to reclaim overpaid taxes.
   
• Employee benefits: Up to 25K in tip income and 12.5K in overtime wages become federally income-tax-free per employee (until 2028), helping you attract and retain workers if you’re in a high-tip industry.

Keeping up with tax legislation as a small business owner often feels like playing a game where the rules keep changing mid-play. And now, with the Senate’s version of Trump’s “One Big Beautiful Bill” out (and likely headed for a final vote by July 4th), you’re probably wondering:

“What does all this actually mean for my business?”

You’re not alone – my team and I have been fielding calls and emails all month from business owners who are also trying to figure it out. And for good reason, because this bill could change your business’s tax position significantly.

So, it’s time to tighten up your planning and make sure you’re positioned to stay on top of every tax savings opportunity possible. (Which is my goal in writing to you today.)

Now, before we get to the nitty-gritty of what matters for your business, here’s a lightning-round recap of what’s in the latest version of the “One Big Beautiful Bill”:

• State and Local Tax (SALT) Deduction: Capped back down to 10K (but it’s still under negotiation).
   
• Car Loan Interest: Deduct up to 10K/year for loans on new U.S.-built vehicles through 2028 (but only if you buy new).
   
• Electric Vehicle Credits: The 7.5K credit expires 180 days after the bill becomes law.
   
• Child Tax Credit: The Senate wants to boost it to 2.2K per child, adjust for inflation, and make it permanent.
   
• Additional Deduction for Seniors: If you’re over 65, you would get an additional 4K deduction on top of the standard deduction (phasing out starting at 75K in annual income). 
   
• Medicaid Cuts & Work Requirements: Stricter than the House’s version of the bill, especially for parents with kids over 15.

And now, onto the big items you should pay attention to for your business.

 

“What does the One Big Beautiful Bill mean for my business?”

1. Tips & Overtime 

Under the Senate version, up to 25K in tip income per person and 12.5K in overtime wages can be federally income-tax-free (double that for married couples). But there are catches…

First, this exemption phases out once a worker earns over 150K (or 300K for couples). Second, it’s temporary – gone after 2028 unless Congress extends it. And third, it only applies to income tax, not payroll tax. So don’t expect savings on your end of FICA.

Still, if you’re in hospitality, logistics, food service, or anything with heavy overtime or tipping… this could help you recruit and retain good workers. Just know that your payroll systems need to be airtight, and you’ll need to meticulously track all tips and overtime.

2. The QBI Deduction 

The Qualified Business Income deduction is set to disappear after 2025 unless Congress acts. Trump’s tax bill wants to make that 20 percent deduction permanent, which is huge news for pass-through entities.

The proposal also raises the income limits before your deduction starts shrinking. We’re talking 50K more for individual filers and 100K more for married couples filing jointly. Plus, there’s a new safety net: even smaller businesses would get at least a 400 dollar deduction if they have 1K or more in qualified business income and are actively involved in their business.

Whether you run an LLC, S-Corp, or sole proprietorship, these are potentially game-changing for your bottom line. Now’s the time to dust off those financial projections and see what these expanded thresholds could mean for your tax bill.

3. SALT Workarounds 

The PTET workaround (that nifty strategy where your pass-through entity pays state tax at the entity level, letting you deduct it federally despite the SALT cap) is mostly preserved under the Senate plan.

That includes Specified Service Trades or Businesses (SSTBs), which the House bill would have kicked out. 

Under the Senate version, you can deduct:

• Whatever’s left of your 10K SALT cap, PLUS…
   
• …the greater of 40K or 50 percent of your PTET liability

Still a nice benefit – but you’ll want to model out how much is actually deductible under this formula. Don’t assume it’s all going through.

4. Bonus Depreciation 

Bonus depreciation lets you write off the full cost of qualifying equipment and machinery in the year you buy it, instead of spreading that deduction over several years like you normally would.

The Senate wants to make 100 percent bonus depreciation permanent – a HUGE savings opportunity if you’re in construction, manufacturing, agriculture, logistics, or any capital-heavy business.

5. R&D Expensing 

The Senate plan would let businesses fully expense domestic R&D again AND retroactively elect bonus depreciation all the way back to 2022 (if your gross receipts are under 31 million). 

If you’ve filed taxes based on amortized R&D for 2022 or 2023, we should talk. You might be able to amend and reclaim your overpaid tax.

6. Auto Loan Interest 

Thinking about buying some new vehicles for your business? You could deduct up to 10K in loan interest paid (a saving grace when loan interest is high), but only if it’s a U.S.-built, new car or truck. This is a temporary benefit through 2028.

 

Key Takeaways 

This bill is packed with opportunities that could save your business money – but only if you’re prepared. Because the businesses that get ahead of these changes will be the ones cashing in on the savings, while everyone else scrambles to catch up.

So, start modeling how these proposals could impact your business. Revisit your 1) entity structure, 2) R&D strategy, 3) equipment purchase plans, and 4) PTET participation. If you’ve been on the fence about Qualified Opportunity Funds or buying that new truck for your work fleet, now’s the time to run numbers.

And if you’re not using PTET or maximizing your QBI deduction under your current setup, let’s work on that before Q4.

 

FAQ

“When will these changes actually take effect, and how long do I have to plan?”

This is still a moving target. Even if it passes by July 4th (as projected), don’t bank on every provision surviving as written. That said, some pieces like R&D expensing could be retroactive, so we need to start modeling scenarios early. I’m already starting to have those conversations with our clients now.

“How much could the expanded QBI deduction actually save me?”

That depends on your taxable income, not just your business income. If you’re hitting the current phase-out thresholds, those higher limits could be worth 8K-15K annually. But I need to see your full tax picture – W-2 wages, other income, deductions, the like. 

“Should I rush to buy equipment now or wait for permanent bonus depreciation?”

Don’t chase the tax tail. Buy equipment when your business needs it, not when Congress dangles a carrot. Current bonus depreciation is already generous, and there’s no guarantee this bill passes as written. Make business decisions first. Then optimize the tax treatment.

“I’ve been paying R&D costs over 5 years since 2022. Can I really go back and get a refund?”

Maybe. If you qualify and we amend correctly, yes – potentially substantial refunds. But amended returns get scrutiny, and the IRS will want bulletproof documentation of what constituted R&D. We’d need to review your specific expenses before I’d recommend filing amendments.

“I employ tipped workers. Do I need to change anything with payroll?”

You’ll need solid tip tracking and reporting systems. The IRS will want to see clear documentation showing which tips qualify for the exemption and which don’t – especially since this only applies to income tax, not payroll tax. I’m recommending my clients upgrade to POS systems that automatically track and allocate tips, and make sure every employee understands the reporting requirements.

 

If even one of the changes above could apply to your business, that’s a conversation worth having now before tax time comes around again. I can help you model out scenarios and build helpful strategies. Yes, the rules may be changing, but the goal stays the same: keep more of what you earn. So, let’s talk about your next best move:
calendly.com/eco-tax-free-consultation/meeting