Trump’s Big Beautiful Bill: Unlocking Tax Breaks for Business Owners

Small business owners say taxes are their #1 concern in 2025—and it’s no wonder why. With inflation, rising wages, and economic uncertainty, every dollar counts. The good news? Help is on the way.

President Donald Trump’s newly signed One Big Beautiful Bill is being called one of the most pro-small-business tax packages in modern history. Building on the 2017 Tax Cuts and Jobs Act (TCJA), this newly enacted legislation locks in and expands the very tax breaks that helped small businesses grow during Trump’s first term.

Let’s look at what’s inside—and how you can get ahead.

From the TCJA to the One Big Beautiful Bill: Why It Matters

Originally introduced under the Trump administration, the TCJA changed the game for small business owners, slashing the corporate tax rate and introducing the 20% qualified business income deduction (Section 199A) for pass-through businesses. But many of those tax cuts are set to expire at the end of 2025.

That’s where the One Big Beautiful Bill comes in.

This new bill that was signed into law on July 4th:

• Makes the Trump Tax Cuts permanent
• Raises the pass-through deduction from 20% to 23%
• Expands Section 179 expensing
• Introduces new tax breaks for tipping and overtime
• Increases the SALT deduction cap
• …and more.

Let’s break down the key provisions for business owners.

Key Wins for Small Business Owners

1. Corporate Tax Rate Locked at 21%

The TCJA’s historic cut of the corporate tax rate from 35% to 21% remains—and the Big Beautiful Bill makes that rate permanent.

The bill also locks in more favorable treatment for:

• GILTI (Global Intangible Low-Taxed Income)
• FDII (Foreign-Derived Intangible Income)

Both were set to become more expensive over time. Keeping these rates low gives international and export-heavy businesses more room to grow.

The bill also changes how businesses calculate their interest deductions, using EBITDA (earnings before interest, taxes, depreciation, and amortization) instead of EBIT. This gives companies—especially in industries like manufacturing and real estate—more room to deduct interest and lower their taxable income.

2. Bigger Pass-Through Deduction (Section 199A)

If you’re a sole proprietor, LLC, S corp, or partnership, here’s great news: the bill raises the qualified business income (QBI) deduction from 20% to 23% and makes it permanent.

That means more of your income could be tax-free, depending on:

• Your total taxable income
• The wages you pay
• How your business is structured

This update alone could lead to higher wages and thousands in tax savings each year.

3. Section 179 Expensing Doubles

Need to buy equipment, software, or work vehicles this year? The new law raises the Section 179 deduction cap from $1.25 million to $2.5 million, with the phase-out threshold increasing to $4 million.

This lets you fully deduct the cost of qualifying purchases in the year they’re placed in service. It’s a huge benefit for businesses reinvesting in growth, and it gives you more flexibility in managing taxable income.

Bonus depreciation remains in play too—still at 40% for 2025—if you go over the Section 179 limit.

While Section 179 focuses on business-related equipment, President Donald Trump’s new bill has also sparked discussions about potential deductions for items like auto loan interest tied to commercial vehicle purchases.

4. No Federal Income Tax on Tips and Overtime

One of the more headline-worthy proposals: workers earning less than $160,000 annually will no longer pay taxes on tips up to $25,000 and overtime pay up to $12,500.

That means:

• Tips and OT stay subject to payroll taxes (Social Security and Medicare)
• Withholding still applies, but the deduction kicks in at tax time

For business owners in hospitality, retail, and service industries, this could make hiring easier and increase employee willingness to work more hours.

63% of small business owners say this provision will improve hiring and retention, something many are struggling with post-pandemic.

5. Potential Higher SALT Deduction Cap

The law raises the State and Local Tax (SALT) deduction cap from $10,000 to $40,000 for taxpayers earning under $500,000. This is especially helpful for business owners in high-tax states like New York, California, and Illinois.

Pro-Small Business Momentum

Support for the One Big Beautiful Bill didn’t just come from congressional republicans—it was heard loud and clear from Main Street America. Across the country, small business owners rallied behind President Donald Trump’s Big Beautiful Bill Act, seeing it as the boost they need to stay competitive, expand operations, and invest in their teams.

While large corporations already benefit from a permanent 21% corporate tax rate, many small businesses have been left in limbo, not knowing if their tax savings will last. That uncertainty makes it harder to plan, hire, and invest long-term.

With support from the federal government, the One Big Beautiful Bill gives small businesses the same long-term certainty already afforded to large corporations.

Other Key Provisions to Watch

While the One Big Beautiful Bill is getting the most attention for its small business tax cuts, it’s part of a much broader package aimed at reshaping the role of the federal government. The bill includes high-profile measures related to border security, national defense, welfare reform, and spending cuts, but there are also some key tax-related changes worth watching outside the business world.

For example, President Trump’s new bill includes an expansion of the child tax credit, which could provide additional relief to working families and sole proprietors juggling household expenses. There’s also growing interest in how deductions related to auto loan interest—especially for business-use vehicles—might evolve under the new rules.

In addition, the bill includes a doubled death tax exemption, allowing individuals to shield up to $12.92 million from estate taxes—an important planning opportunity for business owners looking to pass wealth to the next generation.

Much like President Trump’s original tax reform, the new bill is framed as a path to stimulate economic growth, increase take-home pay, and give small business owners room to reinvest. By reinforcing and expanding the policies introduced in the original Jobs Act, this bill will deliver stability and opportunity for entrepreneurs and working families.

Strategic Tips for Business Owners

With the One Big Beautiful Bill now signed into law, now is the time to get proactive. Whether the Senate passes the bill in its current form or sends it back with changes, small business owners who start planning now will be in the best position to benefit.

Here’s what to do today:

1. Meet with a tax strategist to map out different scenarios under current law versus proposed changes—especially for 2025 planning.
2. Reevaluate your entity structure. The 21% corporate tax rate remains, and with permanent GILTI/FDII provisions and EBITDA-based interest deductions, a C corp may offer long-term advantages. For pass-throughs, the increase to a 20% QBI deduction could be a game-changer—but only if you’re structured and reporting income correctly.
3. Plan equipment and software purchases now. The Section 179 cap increase to $2.5 million could be your best opportunity to fully expense major upgrades. Combine this with bonus depreciation (still at 40% for 2025) for even greater tax savings.
4. Build a hiring and retention strategy around the proposed tip and overtime tax deduction. This provision makes it easier to offer overtime shifts or attract workers in tipped positions, especially in service, hospitality, and retail industries.
5. Review your QBI (Qualified Business Income) calculation. Ensure your income, wage, and property levels are optimized to qualify fully.
6. Use 2025 to amend and catch up. If you missed out on TCJA benefits in previous years, consider whether amended returns or proactive adjustments could position you better for the future.

Don’t Wait for Congress—Start Planning Now

Backed by economic advisers who see this bill as a driver of economic growth, these changes will create long-term opportunities for small businesses nationwide. But even before the ink is dry, now is the time to prepare your strategy and position your business to benefit from the tax breaks already on the table.

At OTB Tax, we help business owners navigate complex tax laws with confidence. Our goal isn’t just to prepare returns—it’s to free up your money legally, morally, and ethically.

Need help understanding how the Trump bill will impact your business? Let’s talk. Schedule a strategy session today.