When new legislation drops midyear, business owners are often left wondering: “What does this mean for me personally?” In this follow-up to last week’s webinar, Morgan Holmes, CPA and owner of Stride Services, returns to unpack exactly how the One Big Beautiful Bill affects not just your business—but your individual tax return.
If you’re a business owner filing as a sole proprietor, S-Corp, or LLC, this conversation is packed with insights that directly affect your financial bottom line.
Key Takeaways
1. Retroactive Bonus Depreciation Applies to Individuals, Too
Just like on the business side, bonus depreciation is now back at 100% for qualifying fixed assets placed into service after January 19, 2025. That includes sole proprietorships and rental properties—meaning it applies to more than just corporate entities.
Morgan emphasized that this change is retroactive for 2025. If you made major purchases earlier this year—think computers, office furniture, or building improvements—you may have overpaid on your Q1 or Q2 estimated taxes.
Key Insight: If you made major purchases earlier this year, you may have overpaid on your estimated taxes. Review your asset schedule ASAP to see if you’re due a reduction—or even a refund.
2. Section 179 Deduction Doubled for More Strategic Flexibility
Section 179, which lets you elect how much depreciation to take on specific assets, has been significantly increased. This gives individuals—especially those with pass-through income—more control over their tax position throughout the year.
Unlike bonus depreciation, which applies automatically, Section 179 is elective and customizable. Morgan noted that this makes it a powerful lever when you’re trying to land below an AGI threshold to maximize a deduction or qualify for a credit.
Pro Tip: If you’re targeting a specific AGI threshold to qualify for credits or deductions, Section 179 is a useful tool for fine-tuning.
3. QBI Deduction Made Permanent
The 20% Qualified Business Income deduction, originally set to expire in 2025, is now permanent. This is a major win for S Corp owners and other pass-through entities who were facing potential phaseouts under the old rules.
Now, owners of pass-through businesses can lock in this deduction year after year, knowing it’s no longer tied to temporary legislation.
Why it matters: Locking in this deduction means more predictability and less urgency to restructure your entity type as sunset provisions loomed.
4. R&E Expenses: A Second Chance to Capture Refunds
Previously, domestic research and experimental (R&E) expenses had to be capitalized and amortized over five years. Not anymore. The bill reinstates immediate expensing of U.S.-based R&E costs, and here’s the kicker: it’s retroactive.
Morgan explained that business owners can amend their 2022–2024 returns to reclaim deductions they lost when the capitalization rule was in place. That could mean real refunds.
Key Insight: If you’ve invested in U.S.-based innovation, you may be entitled to a retroactive refund. Don’t leave that money on the table.
5. Individual Tax Rate Reductions Locked In
The lower tax brackets introduced in 2017—such as reducing the top individual rate from 39.6% to 37%—were also set to sunset. Under the new bill, these lower rates are now permanent.
Result: Greater tax stability for high-earning business owners.
6. New Individual Benefits to Know
The bill didn’t just preserve existing tax breaks—it introduced several new ones:
- Tax-Free Tips & Overtime: Up to $25,000 can now be excluded from income, subject to AGI limitations.
- Expanded Child Tax Credit: Increased from $2,000 to $2,200 per child.
- 529 Plan Flexibility: Funds can now be used for K–12 tuition (though state conformity may vary).
- Deduction for Auto Loan Interest: Up to $10,000 in interest on new U.S.-assembled vehicles may be deductible.
- Student Loan Support: Employer contributions to student loans are now deductible for the business and non-taxable to the employee.
- Child & Dependent Care Credit: Now easier to qualify and more accessible for middle-income families.
These changes make the tax code more favorable for a wider range of business owners and their households.
7. Tax Credit Cuts: What’s Going Away
While there’s plenty of good news, the bill also rolls back several previously popular credits. Morgan warned not to wait on:
- EV Credit Removed: Electric vehicle tax credits will sunset after September 30, 2025.
- Residential Energy Credits: The $1,200 annual credit for windows, skylights, and energy-efficient upgrades is being phased out.
- Solar Panel Tax Credit: The 30% credit for solar panels and battery systems also disappears.
Action Step: If you’re planning energy-efficient home upgrades, don’t wait—get them done in 2025.
8. SALT Cap Raised & Senior Deduction Added
Two long-awaited personal tax relief changes are finally here:
- SALT Deduction Cap Increased: The state and local tax deduction cap increases from $10,000 to $40,000—a huge benefit in high-tax states like California and New York.
- Senior Deduction Boosted: An additional $6,000 deduction is now available for seniors under certain income limits, helping older taxpayers retain more income in retirement.
9. Trump Child Savings Accounts Debut in 2026
Starting next year, families can contribute up to $5,000 annually to these new tax-advantaged savings accounts. Children born between 2025 and 2028 will receive a one-time $1,000 federal contribution.
Note: These accounts are separate from 529 plans and can be used for broader purposes such as education, housing, or even business funding later in life.
10. Charitable Deductions Return for Non-Itemizers
Reintroduced from CARES Act-era rules, taxpayers can now deduct up to $600 in charitable giving—even if they don’t itemize. It’s a small change with big potential, especially for donors who take the standard deduction.
Final Thoughts
The One Big Beautiful Bill introduces a lot of complexity—but also a lot of opportunity. Whether you’re looking to capture missed deductions, lower your AGI, or just ensure you’re not leaving cash on the table, proactive tax planning has never been more important.
Midyear is the right time to reevaluate your estimates, review your return from a strategic lens, and work with an advisor who understands how the pieces fit together—business and personal.
Want to watch the full conversation?
Watch the full webinar on LinkedIn.
About Stride Services
Stride Services is a comprehensive financial partner for MSPs, providing outsourced bookkeeping, tax, and advisory services designed to improve clarity, support confident decision-making, and eliminate financial fire drills. Whether you need monthly accounting support or proactive tax guidance, Stride helps you stay on track and plan for what’s next.
To learn more, visit www.stride.services.
Show Notes + Transcript:
Casey Seaborn: Email
LinkedIn: Casey Seaborn
Morgan Holmes: Email
LinkedIn: Morgan Holmes
