The 2025 H.R.1 entitled, “Big Beautiful Bill,” recently introduced by President Donald Trump, brings sweeping tax reforms that significantly impact small business owners across the country. If you're a sole proprietor, LLC owner, S-Corp shareholder, or run a family-owned business, these changes could either save you thousands—or cost you if you’re unprepared.
In this blog, we’ll break down how the new tax bill affects small business owners, what opportunities it offers, and key steps you can take to make the most of it.
🔍 1. Lower Tax Rates for Pass-Through Entities Continue
One of the biggest wins for small business owners is the continuation (and possible expansion) of the 20% Qualified Business Income (QBI) deduction under Section 199A. If you're a sole proprietor, partnership, or S-Corp, this allows you to deduct up to 20% of your net business income from your taxable income.
✅ Action Step: Talk with your tax advisor about how to optimize your compensation between salary and distributions to maximize your QBI deduction.
💸 2. Bonus Depreciation Phase-Out Adjusted
The bill modifies the bonus depreciation phase-out schedule, allowing business owners to still write off a large percentage of equipment and asset purchases made in 2025. This is great news if you're investing in:
Vehicles
Machinery
Office equipment
Technology
🔧 Update: In 2025, bonus depreciation allows for 100% immediate expensing, as compared to 60% in 2024.
✅ Action Step: If you plan to buy business assets, do it sooner than later to take advantage of the remaining bonus depreciation.
🚙 3. Higher Section 179 Expensing Limits
Section 179 allows you to immediately deduct the full cost of qualifying business equipment and vehicles, up to a limit. The 2025 tax bill increases this threshold.
🚨 New Limit: Section 179 now allows you to deduct up to $2,500,000 in equipment and SUV purchases (with the luxury SUV cap increased to $31,300).
✅ Action Step: If you’re looking to upgrade your fleet or invest in large purchases, make sure you know the difference between bonus depreciation and Section 179—you might be able to combine both!
🏡 4. Energy Tax Credits for Business Properties
The bill revives and expands energy-related tax credits for commercial property owners and small businesses that make energy-efficient upgrades. These credits apply to:
Solar panels
EV chargers
Roofing and insulation
HVAC systems
✅ Action Step: Consider investing in green upgrades—they may not only reduce your tax bill but also lower your utility expenses long-term.
🧾 5. Audit Risk & Recordkeeping Requirements
With increased deductions and credits, the IRS may increase scrutiny on high-expense claims, especially in areas like vehicle use, home office deductions, and meals.
✅ Action Step: Keep detailed records of business use, mileage logs, receipts, and written accountability plans for reimbursements.
📈 Final Thoughts: It’s Time to Get Proactive
The new tax bill creates real opportunities for tax savings, but only if you plan ahead. Whether it’s buying a vehicle, making building improvements, or adjusting your compensation strategy, small business owners need to act intentionally in 2025.
