The Big Beautiful Summary of The Bill

So, ya know how we can’t go anywhere, listen to anything, or watch anything without someone talking about the Big Beautiful Bill? It’s ALL OVER social media too! Well, as you probably know, this bill has advanced and was approved by congress and signed into law. Included in this bill was some comprehensive tax and spending in it that will have some sort of effect on most of us individuals as well as businesses. Let’s jam through the big beautiful summary of the bill and some of the things that were included, what planning opportunities there are to set us up for success, and what kind of things we can you do to help you make to most your tax benefits as well as avoid any potential pitfalls.

What To Know About the Big Beautiful Tax Bill

Permanent Lower Individual Tax Rates & A Higher Standard Deduction

What It Means:
The individual tax brackets from the 2017 Tax Cuts and Jobs Act are made permanent. That means the lower marginal tax rates—like 10%, 12%, 22%, 24%, 32%, 35%, and 37%—stick around instead of creeping back up. The standard deduction also stays nearly doubled, sitting at around $14,600 for singles and $29,200 for married couples filing jointly.

Why It Rocks:
This can give us more long-term planning. It also can give us more certainty for personal budgeting, tax withholding, and our retirement strategies like Roth conversions. With no sunset in sight, you can plan a bit more confidently.

Real-World Example:
Let’s say you’re a single W-2 worker earning $80,000. Before the Tax Cuts and Jobs Act, more of your income would’ve been taxed at higher rates (25% and above). However, now your tax bill will be hundreds to thousands less each year. That’s money you can throw into a brokerage account, max out your Roth IRA, or maybe that pointy guitar. 🙂 

Qualified Business Income (QBI) Deduction – Boosted to 23%

What It Means:
The Quality Business Income deduction allows eligible pass-through businesses like LLCs, S corps, sole proprietorship, or partnerships to deduct a percentage of their qualified business income. Previously capped at 20%, this bill now raises it to 23% and makes it permanent.

Why It Rocks:
That’s a direct, no-nonsense tax break for entrepreneurs and small business owners. This is especially beneficial for those running lean, mean, solo operations.

Real-World Example:
Let’s say you’re a freelance graphic designer netting $100,000 in business income. With the new 23% Quality Business Income Deduction, you shave $23,000 off your taxable income—meaning you’re taxed as if you made just $77,000. That’s an instant tax-cut. With this now being permanent, you can confidently structure your side gig or LLC knowing the deduction isn’t disappearing after 2025.

100% Bonus Depreciation Restored

What It Means:
Businesses, and real estate investors can now immediately write off the entire cost of qualifying property as well as other equipment, furniture, or vehicles in the year it’s placed into service between January 20, 2025 and January 1, 2030.  This used to phase out gradually after 2022 but this bill throws that out the window. Normally, depreciation is like a slow drip, giving you a little deduction each year. But now it’s like a freaking fire hose!

Why It Rocks:
This is like putting your capital investment on a rocket. No waiting years to recover your costs. You buy it, you write it off—now.

Real-World Example:
You run a podcast studio and drop $30,000 on killer new recording gear, lighting, and computers in late 2025. With 100% bonus depreciation, you can deduct the full $30K right away, cutting your taxable business income and potentially dropping your overall tax bill by $6,000–$8,000 depending on your bracket. BONUS!

State and Local Taxes Deduction Cap Raised

What It Means:
The deduction for state and local taxes (SALT) goes up from the infamous $10,000 cap to a $40,000 cap for taxpayers with modified AGI under $500,000. However, server based or trade based business like doctors, lawyers, or consultants can’t dodge this via entity-level deductions.

Why It Rocks:
Taxpayers in high-tax states like California, New York, or where I live in Minnesota finally get some more relief. You can now deduct more of what you’re already paying to your state and local governments.

Real-World Example:
If you are a married couple earning $250,000 in Minneapolis, let’s say you pay $15K in state income taxes and $9K in property taxes. Before, you could only deduct $10K of that. Now, you should be able to deduct the full $24K! This is saving you roughly $3,000–$5,000 in federal taxes!

Enhanced Family and Payroll-Related Credits

What It Means:
The employer-provided child care credit gets beefed up. The paid family and medical leave credit is now made permanent, and new above-the-line deductions are available for tips and overtime for 2025–2028. You may have been hearing people say, “No tax on tips, and no tax on overtime!” Let’s break this down.

Why It Rocks:
More financial relief for working families and hourly workers. Plus, employers can claim stronger credits for offering benefits like childcare or paid leave.

Real-World Examples:
You’re a single parent working a restaurant job earning tips and overtime. From 2025 through 2028, you can deduct those tip and overtime amounts directly from your gross income, reducing your taxable income and potentially dropping into a lower tax bracket. That’s a rare break for hourly workers. Let’s look at what could like more specifically.

If you are a restaurant worker or work in the service industry. Let’s say you are a server in a busy restaurant and earn:

• $28,000 in base wages
• $12,000 in tips
• $3,500 in overtime

Before the new law: You pay taxes on the full $43,500. The full amount of your wages, tips and overtime added together.

Under the Big Beautiful Bill: You can deduct $15,500 (your tips + OT), so you only pay taxes on $28,000. That could cut your tax bill by $2,000–$3,000 depending on your bracket. Keep in mind that if you qualify, there’s a maximum deduction cap:

• Up to $10,000 per year of combined tip + overtime income can be deducted.
• You can’t deduct more than the actual amount of tips and overtime you earned, obviously.

So if you earned $15,000 in tips and overtime, you can only deduct $10,000 max. If you earned $6,000, you deduct all $6,000 (assuming you’re under the income limit). The deductions for tips and overtime begin to phase out as your Adjusted Gross Income (AGI) increases as well. It does gets kind of confusing. There are phase out ranges of income where our deductions will decrease. Maybe it will make a little more sense using this table:

Filing Status	Full Deduction Below	Phaseout Range	No Deduction After
Single	$45,000	$45,000–$75,000	$75,000+
Head of Household	$60,000	$60,000–$90,000	$90,000+
Married Filing Jointly	$90,000	$90,000–$140,000	$140,000+

So, if you’re under the lower threshold, you get the full deduction for your tips and overtime pay. If you fall within the phaseout range, you get a reduced deduction. And, if you’re above the upper limit, you don’t get it at all. Please, remember, this is just informational purposes only, and I encourage you to speak with your tax professional about your specific situation.

Green Energy Credits Phased Out

What It Means:
Tax credits for electric vehicles (EVs), solar panels, energy-efficient appliances, etc., are being phased out faster than originally planned.

Why It Rocks (or doesn’t):
This is more of a warning riff. Act fast if you’re planning to green up your life. After the phase-out, you’ll miss out on big credits like the $7,500 EV tax break or solar installation incentives.

Real-World Example:
Let’s say you want to install a $20,000 solar system on your home. Right now, you’d get a 30% federal tax credit, or about $6,000 back. But if you wait too long, that might be gone. Pull the trigger now or risk paying full freight.

Full Estate Tax Repeal

What It Means:
The federal estate tax what some call the death tax (sounds so Metal) will be eliminated. Previously, those higher value estates above roughly $13.6 million per individual were subject to 40% tax above that threshold. Now that’s gone.

Why It Rocks:
Higher-net-worth families can transfer wealth without federal estate tax hits. And it simplifies estate planning strategies by removing the need for crazy complex trusts solely designed to avoid this tax.

Real-World Example:
Let’s say you built a $15 million real estate empire and want to pass it on to your two adult kids. Before, $1.4 million could’ve been taxed at 40%—that’s a $560,000 tax hit. Now, your full estate can transfer tax-free, preserving generational wealth and letting your kids keep rockin’ the rental income.

What Planning opportunities Are There?

Review Entity Structures

What to Do:

• LLC, S-Corp, or Sole Proprietor? Now’s the time to evaluate or restructure your business entity to maximize the newly expanded 23% QBI deduction.
• Check for limitations that are specified for service trades or businesses that might reduce your QBI eligibility at higher incomes.
• Look into electing S-Corp status if you’re a sole proprietor and hitting self-employment tax hard.

 Accelerate Capital Investments

What to Do:

• Advance purchases of eligible equipment or property into the bonus depreciation window (2025–2030). This helps me as I’m now working on this commercial real estate project.
• Run projections: Does it make sense to buy that truck, camera rig, or commercial equipment next year instead of waiting?
• Real estate investors: Consider cost segregation studies and plan rehabs, upgrades, and renovations to fall within the bonus depreciation window.

Model SALT Impacts

What to Do:

• If you’re in a high-tax state like California, New York, or again, where I live in Minnesota, it may be time to review how the new $40K State and Local Tax cap and $500K AGI phase-out may affect your deductions.
• Evaluate entity-level tax elections like pass-through elections carefully — especially since those service based business are now excluded from entity-level SALT workarounds.
• Consider timing of property tax and state income tax payments in 2025–2026 to optimize any deductions.

Act Quickly on Green Energy Credits

What to Do:

• If you’ve been sitting on the fence about installing solar panels, buying an electric vehicle, or upgrading to energy-efficient windows or HVAC, pull the trigger before the credits vanish.
• Research which credits are being phased out or repealed outright — some are already time-sensitive.

Enhance Employee Benefits

What to Do:

• If you run a business with employees, evaluate offering things like child care assistance, paid family leave, or flexible schedules to boost retention. Offer good benefits, and keep those peeps around. Now that credits are expanded and made permanent, why not! It’s the good thing to do.
• Consider integrating these benefits into compensation packages to offset wage inflation.

Revisit Estate Plans

What to Do:

• With the federal estate tax on the chopping block, it’s time to review things like trusts, wills, gifting strategies, and advanced planning tools.
• For ultra-high-net-worth folks (you know who you are lol), Spousal Lifetime Access Trusts, Grantor Retained Annuity Trusts, or Irrevocable Life Insurance Trusts, and other legacy tools may need revisions or unwind strategies.
• Consider gifting strategies now — while the unified credit remains high and before any political reversal.

Effective Dates and Transition Rules

This Big Beautiful Bill can pack some serious financial firepower into our financial plan. Whether you’re grinding as a freelancer, running your own business, or just trying to get your taxes under control, this bill offers long-term certainty, bigger deductions, and smart planning opportunities.

Most of these things are effective for tax years beginning after December 31, 2025, but some (such as bonus depreciation and those green energy credit repeals) require some immediate attention. Transition rules may provide limited relief, but clients should not assume grandfathering without confirmation with your own tax or financial planner. Thanks for jamming, and keep those horns up \m/ \m/ .