What the One Big Beautiful Bill Act Means for You (and Your Business)

The One Big Beautiful Bill Act was signed into law on July 4, 2025, and it has major tax implications for individuals and small business owners. Putting a tax plan in place now can reduce anxiety and provide you with peace of mind.  Here are some key points we think you should know about.

For Individual Taxpayers

• Standard Deduction Increase: Starting in 2025, the standard deduction goes up to $15,750 for single filers and $31,500 for married couples filing jointly. This means more of your income is tax-free.
• Child Tax Credit Boost: The credit increases to $2,200 per child in 2025 and will adjust for inflation each year. The refundable portion is capped at $1,400 per child, also indexed to inflation which will bump it up to $1,700 in 2025.
• SALT Deduction Cap Raised: The limit on state and local tax deductions jumps from $10,000 to $40,000 through 2029, helping those in high-tax states.
• New Deductions for Employees:
  • Tipped workers can deduct up to $25,000 in tips.
  • Hourly workers can deduct up to $12,500 in overtime pay.
  • Seniors (65+) get a $6,000 bonus deduction through 2028.

For Businesses

One of the biggest wins for small and medium-sized businesses is the change to Domestic Research and Experimental (R&E) expenses. These changes are designed to make tax planning easier and encourage investment and growth—especially for businesses doing research or buying new equipment:

• Immediate Expensing of R&E: Businesses can now deduct domestic R&E costs right away instead of spreading them out over several years. This applies to expenses starting in 2025 and can be applied retroactively to 2022 for certain small businesses.
• Section 199A Deduction Made Permanent: Pass-through businesses (like LLCs and S-corps) can continue to deduct up to 20% of qualified business income.
• Bonus Depreciation Returns: Businesses can again deduct 100% of the cost of certain equipment and property in the year it’s placed in service.

Passing this bill in July means that there is still plenty of time in 2025 for you to put a proactive tax plan in place. Begin planning today to ensure you put yourself in the best possible position to reduce your tax liability and take advantage of all tax savings opportunities.

And business owners don’t forget—your business tax choices directly shape your personal financial future! Click here to access our mid-year checklist of action items specific to business owners.

See also: 5 Manageable Takeaways from the “One Big Beautiful Bill”

Click here to access additional details about the new tax bill in an article from the Journal of Accountancy.

Click here for personal financial planning considerations from our affiliated and separately registered financial planning firm Copper Leaf Financial.

Davis & Hodgdon works with individuals and business owners to capitalize on all applicable deductions. Our experienced accountants make sure that nothing is missed! For more information or to set up an appointment please click here or email [email protected].

Recipients should not act on the information presented without seeking prior professional advice. Additional guidance may be obtained by contacting Davis & Hodgdon at 802-878-1963 (Williston) or 802-775-7132 (Rutland).