What the Big Beautiful Bill Means for Families and Small Businesses
When new tax laws pass, the details can feel overwhelming. The One Big Beautiful Bill (OBBBA), signed into law by President Trump, brings sweeping updates for individuals, families, and small businesses. Some changes are permanent—providing long-term stability—while others are temporary and set to phase out in a few years.
Here’s a look at what’s changing, plus two real-world examples to show how these updates might play out for everyday families and business owners.
Permanent vs. Temporary: What Stays and What Fades
✅ Permanent: Larger standard deduction, 20% small business deduction (QBI), expanded employer family leave credits, tax-free student loan benefits.
✅ Permanent: Non-child dependent credit ($500), higher Dependent Care FSA limits, expanded employer childcare credits.
🕒 Temporary (2025–2029): State and Local Tax (SALT) deduction cap raised from $10,000 to $40,000. (SALT = state and local taxes you pay, like property or state income taxes, which you can deduct on your federal return).
🕒 Temporary (2025–2028): Senior standard deduction “boost,” new deductions for tips and overtime pay.
🕒 Temporary (2025–2028): Federal $1,000 seed money for new Trump Accounts for children.
Example 1: A Middle-Class Family
Meet the Smiths:
Married couple filing jointly, household income: $95,000
Two school-aged children, ages 8 and 11
Own their home
How OBBBA affects them:
Standard Deduction: Permanently higher, so they don’t need to itemize. Their taxable income is reduced automatically, saving time and money.
Child Tax Credit: Each child now qualifies for a $2,200 credit (up from $2,000), totaling $4,400 in credits. And it’s indexed for inflation, so it grows over time.
SALT Deduction Cap: Their property taxes often exceeded the old $10,000 cap. Now, through 2029, they can deduct more in state and local taxes, which lowers their federal taxable income.
Overtime Deduction: If one parent picks up extra shifts, they may be able to deduct part of that overtime pay—potentially saving a few hundred dollars more.
Education & Savings: While their kids aren’t eligible for the new $1,000 Trump Account seed (since they were born before 2025), they could be eligible to open accounts and grow savings tax-deferred for college or future expenses.
Bottom Line for the Smiths: They benefit from a larger child tax credit, a bigger potential SALT deduction, and new ways to save.
Example 2: A Small Business Owner (S-Corp)
Meet Maria:
Owns a local design firm, structured as an S-corporation
Annual profit: $100,000 (after expenses)
How OBBBA affects her:
QBI Deduction: Maria qualifies for the 20% pass-through deduction, which is now permanent. She can deduct $20,000 of her $100,000 profit before calculating her taxable income.
Equipment & Expensing: If Maria upgrades her office computers or buys new software, she can deduct more of those costs upfront, boosting cash flow.
Family & Medical Leave Credit: If she offers paid family or medical leave, she can claim a tax credit of up to 25% of wages paid, lowering her tax bill while supporting employees.
Childcare Credit for Employers: Her business now qualifies for an even higher childcare support credit—up to 40% (and as high as 50% for small businesses).
Personal SALT Deduction: As a homeowner filing jointly, Maria’s family also benefits from the SALT deduction cap temporarily increasing.
Bottom Line for Maria:
She locks in a permanent 20% business deduction, can expense more equipment, and has access to stronger credits for supporting her team.
Why This Matters
The One Big Beautiful Bill creates real opportunities for both families and business owners—but it’s also a mix of permanent and temporary provisions. Knowing which benefits expire (like the SALT deduction increase) versus which stay (like the QBI deduction) is key to planning ahead.
At Freedom Tax & Accounting, we help you understand how these changes affect your unique situation—so you can make confident financial decisions and keep more of what you earn. Let’s connect and review your tax situation.