If you own a small business, the so-called One Big Beautiful Bill Act is going to affect you.
This sweeping new law makes the 2017 Tax Cuts and Jobs Act (TCJA) permanent and adds several new rules that will impact your personal and business taxes.
Some provisions help business owners. Others take away tax breaks that many companies have come to rely on, especially those in construction, energy, or vehicle-related industries.
Below, we break down the major changes in the One Big Beautiful Bill Act that small business owners need to know.
Whether you’re running a restaurant, dental office, or service company, these changes could affect your bottom line—and how you plan for the future.
Passed in July 2025, the One Big Beautiful Bill Act (often referred to as the “OBBB”) is one of the most significant tax overhauls in years. It builds on the framework of the TCJA by making many of those temporary provisions permanent, such as lower individual tax rates and the 20% Qualified Business Income (QBI) deduction for pass-through businesses.
But OBBB isn’t just about locking in past tax breaks. It introduces a wide range of new tax credits and deductions, some aimed at helping workers and families, others designed to encourage business investment. These include tax-free treatment of certain tips and overtime wages, larger credits for employer-sponsored child care, and expanded options for educational savings.
At the same time, the law also rolls back many of the clean energy tax incentives introduced under the Inflation Reduction Act of 2022. Credits for electric vehicles, energy-efficient commercial buildings, and solar-related upgrades are being reduced or phased out entirely over the next few years.
In short, this bill is a mix of opportunities and trade-offs. For small business owners, the OBBB brings both potential tax savings and critical planning decisions. Understanding what’s changing and when is essential.
Here’s what’s most important for small businesses and their owners.
While many of the OBBB’s business provisions grab headlines, the changes to individual taxes are just as important, especially for small business owners who file taxes as individuals or through pass-through entities like LLCs, S corps, and partnerships.
Here’s a look at the key updates that could impact your personal tax situation starting in 2026 and beyond.
The tax brackets created by the 2017 TCJA are now permanent. These include rates ranging from 10% to 37%, which is good news for many pass-through business owners.
The SALT deduction cap (state and local tax deduction) was temporarily raised to $40,000 for 2025, but will return to $10,000 in 2030 unless extended again. For estate planning, the estate and gift tax exemption increases to $15 million starting in 2026.
The OBBB includes several long-awaited updates that directly affect how small businesses manage taxes, make purchases, and report payments. From permanent deductions to streamlined reporting thresholds, these changes are designed to simplify planning and reward growth, especially for pass-through entities.
Here’s what every business owner should know.
If your business is a sole proprietorship, S corporation, or partnership, the 20% Qualified Business Income (QBI) deduction is now permanent. The income limits before the deduction phases out were raised to $150,000 (joint filers) and $75,000 (single).
This is a significant win for pass-through businesses, which include companies such as sole proprietorships, partnerships, S corporations, and certain LLCs where the business income is “passed through” to the owners’ personal tax returns rather than being taxed at the corporate level.
If you invest in equipment or assets, this matters:
These changes let you deduct large purchases in the year they’re made instead of spreading them out.
A small but meaningful change:
If your business pays freelancers, vendors, or uses third-party platforms like Venmo or PayPal, this reduces the number of forms you'll need to file.
The OBBB introduces new tax benefits tied directly to your workforce. These updates reward employers who support their teams with paid leave, childcare, and education assistance, and offer significant new breaks on wages, including tips and overtime.
If you have employees, especially in industries like hospitality, health care, or skilled trades, these changes could make a meaningful difference in both retention and your tax liability.
Effective for 2025 through 2028, workers can exclude:
This could reduce employee tax burdens, especially in the food service and personal care industries, and help you attract and retain staff.
If your business has been investing in clean energy, such as installing solar panels, purchasing electric vehicles, or upgrading to energy-efficient systems, several tax incentives are being phased out.
Under the OBBB, many of the clean energy credits introduced by the Inflation Reduction Act are being rolled back or eliminated entirely:
New restrictions also make it harder to qualify for remaining credits, especially those involving components sourced outside the U.S.
If your business is in construction, logistics, or transportation, or you’ve been considering investments in energy upgrades, this phase-out means it's time to revisit your project timelines and financing assumptions. Waiting too long could mean missing out on valuable incentives.
As tax policy evolves, so does IRS oversight — and business owners need to be aware of what’s changing behind the scenes. The OBBB sends a clear message: the IRS is ramping up enforcement, especially when it comes to pandemic-era tax credits. The Employee Retention Credit (ERC), originally intended to support businesses that kept employees on payroll during COVID-19 disruptions, has become a major focus of IRS scrutiny.
If your business claimed the ERC or is still waiting on processing, this new enforcement environment means it's time to get organized. Make sure your documentation is in order, and be cautious about third parties offering “easy money” through amended returns. The IRS is watching closely.
The One Big Beautiful Bill Act brings a mix of opportunities and challenges, depending on your business. Some changes make life easier for small business owners, while others eliminate credits that may have been part of your long-term strategy. Either way, doing nothing isn’t an option.
Understanding how these updates affect your business and making smart moves now can mean the difference between missed savings and meaningful financial advantage.
At TMA Accounting, we help small business owners cut through the complexity. Whether you're reviewing your payroll situation, making a major investment, or trying to stay compliant in a shifting regulatory landscape, we’re here to help you take confident, informed action.
Let’s turn tax changes into business opportunities, together. Schedule a meeting with our team today, and let’s make sure your next move is the right one.