The recently passed One Big Beautiful Bill (OBBB) — often called the One Big Beautiful Tax Act — introduced some of the most significant tax changes in years. For small business owners and self-employed professionals, these updates open new opportunities to save money, invest in growth, and plan smarter.
Here are five “beautiful” tax reduction strategies to help you make the most of the new law.
1. Maximize the 20% Pass-Through Deduction (QBI)
The One Big Beautiful Tax Act made the 20% Qualified Business Income (QBI) deduction permanent — a huge win for entrepreneurs, professionals, and family businesses. This deduction applies to income from S corporations, partnerships, and sole proprietorships.
How to take advantage:
- Ensure your business structure qualifies (LLC, S Corp, partnership).
- Keep taxable income within the phaseout thresholds, especially for service businesses like accounting, law, or consulting.
- Use pre-tax retirement contributions, depreciation, and expense planning to manage your income levels strategically.
Even a well-timed retirement plan contribution can mean the difference between qualifying for or losing part of this valuable deduction.
2. Use 100% Bonus Depreciation and Expanded Section 179
One of the most immediate ways to lower your tax bill is through accelerated expensing. The new law restored 100% bonus depreciation and increased Section 179 expensing limits to $2.5 million, allowing small businesses to deduct the full cost of qualifying equipment, vehicles, or technology in the year of purchase.
How to use it:
If you’ve been delaying capital upgrades — buying new computers, software, or machinery — now may be the perfect time. Making qualified purchases before year-end can dramatically reduce your taxable income for 2025.
This is one of the simplest and most powerful tax-saving tools available to business owners.
3. Revisit R&D Tax Deductions
The Act allows immediate expensing for R&D (research and development) costs, reversing the previous requirement to amortize over five years. This change benefits a wide range of businesses, not just tech or biotech companies.
Who qualifies:
Businesses that invest in innovation, process improvement, or software development — even small firms developing internal systems or new service models — can qualify.
Action step:
Document your R&D activities carefully and work with your CPA to determine whether past or current expenditures can be deducted or credited. You may even be eligible to amend prior returns for additional savings.
4. Optimize State and Local Tax (SALT) Deductions
For many small business owners, the prior $10,000 cap on state and local tax deductions was painful. The new law raises the limit to $40,000 for joint filers, providing significant relief in high-tax states.
How to use it:
Combine the new SALT cap increase with a Pass-Through Entity Tax (PTET) election, where available. This allows state income taxes to be paid at the business level and deducted as an ordinary business expense — often producing thousands in additional tax savings.
Your CPA can help evaluate whether a PTET election makes sense for your situation and state.
5. Take Advantage of New Credits for Employee Benefits
The One Big Beautiful Tax Act expanded tax credits for small businesses that provide childcare assistance, paid family leave, and other employee benefits.
Examples include:
- Up to a 50% credit (up from 25%) for employer-provided childcare.
- Extended and enhanced credits for paid family and medical leave.
Why it matters:
These incentives reduce your overall tax burden and improve employee retention — a valuable combination in today’s tight labor market.
Final Thoughts
The One Big Beautiful Tax Legislation gives small business owners more flexibility and long-term certainty than we’ve seen in years. But with opportunity comes complexity — and that’s where proactive planning pays off.
By coordinating your entity structure, capital investments, employee benefits, and income timing, you can reduce taxes today and position your business for future growth.
Smart tax strategy isn’t just about compliance — it’s about capturing every dollar the law allows. And under this “beautiful” new tax law, there’s plenty to capture. Call us at (336)899-7660 to schedule a consultation.