Congress just passed the “One Big Beautiful Bill Act.” If signed into law, it will bring sweeping tax changes that impact how small businesses and individuals plan, deduct, and invest. 

Here’s your quick breakdown.

FOR SMALL BUSINESSES

Pass-Through Deduction Boosted

• Section 199A deduction increased from 20% to 23%

• Made permanent — big win for S Corps, partnerships, and sole props

New CHOICE Health Credit

• $100/month per employee in Year 1; $50/month in Year 2

• Available to small employers (<50 employees) who offer CHOICE/ICHRA plans

Full Expensing Extended

• Bonus depreciation at 100% extended through 2029

• Applies to equipment, machinery, and certain R&D costs

Payroll Tax Relief on Tips

• Tip income exempt from federal income tax (2025–2028)

• Employer credit relief also expanded (details forthcoming)

SALT Workaround Eliminated

• State pass-through workaround taxes (PTET) may no longer apply in high-tax states like NY, CA

FOR INDIVIDUALS

Car Loan Interest Deduction (NEW)

• Deduct up to $10,000 of interest on car loans (2025–2028)

• Must be U.S.-assembled vehicle

• Phases out at $100K (single) / $200K (MFJ)

Tips & Overtime = Tax-Free

• From 2025–2028, all tips and overtime wages are exempt from federal income tax

SALT Deduction Cap Increased

• Cap raised from $10K to $40K for married couples earning <$500K

• Phased out for higher earners

Child Tax Credit Enhancements

• Expanded refundability and phase-ins

• Indexed for inflation going forward

WHAT’S NOT INCLUDED

• No extension of the Work Opportunity Tax Credit (WOTC) — still expires 12/31/2025 unless separately renewed
• No changes yet to capital gains rates or 1031 exchanges
• Clean energy credits slated for repeal after 2025

What You Should Do Now

• Update your 2025 tax plan to reflect these upcoming changes
• Evaluate whether to switch to CHOICE health benefits
• Review pass-through structure for maximum deduction
• Get clarity on SALT deductions and tip reporting.
  

Still in the Senate’s hands. Stay tuned.

Schedule with Kyle Kinstler, Co-President of Kinstler Brown, Co.

Click the link below to schedule a consultation and take the first step toward transforming your business future.