President Trump’s one big beautiful bill passed in the summer, but little tax benefits have begun. Many main street businesses support a significant gain from the new tax credit next year. Some important companies cost 100%.
Not all advantageous tax measures are completely new. Some have been phased out or gone to the sunset and are now back. However, there is a huge amount of meat in the bill, according to Jeffrey Kelson, co-leader of Eisneramper’s National Tax Office.
Many of the bill’s provisions are particularly advantageous for main street businesses and the local economy, according to Melanie Lauridsen, vice president of tax policy and advocacy at the U.S. Institute of Certified Public Accountants.
Certainly, there are some unknowns still given that the Treasury Department and the IRS still need to publish guidance on implementing and interpreting multiple regulations and bills. But overall, it is considered a boon for small businesses.
Below are some of the key benefits that come to Main Street:
100% business purchase amortization
Small businesses contemplating purchasing a new computer, machine or other equipment often have the ability to deduct 100% of their costs. “This is a big jump from the old 40%,” wrote Ken Webster, CEO of Rocket Legal Professional Services, to small business explanators. PERK applies to assets purchased after January 20, 2025. “This means it could be qualifying for a larger deduction on recent purchases.
Although most of these amortizations are from new items, different tax regulations allow businesses to deduct up to $2.5 million on 100% of certain purchases for taxable years beginning after December 31, 2024. There is also a spending limit before the maximum deduction drops.
Kelson said he recommends talking to a tax advisor about how to maximize these amortization options and enjoy potential state tax benefits.
Big win with R&D deduction
The new law encourages domestic research and development.
As part of the 2017 Tax Cuts and Employment Act, immediate costs for R&D costs ended as of 2022, allowing businesses to amortize R&D expenses over time, allowing them to pay more taxes in certain years. This has been particularly challenging for small businesses, especially high-tech startups like software, said Diana Walker, director of Baker Tilly’s tax practices.
Currently, small and medium-sized enterprises can immediately deduct 100% of domestic research and development expenses incurred since 2024. “This is a great relief for many taxpayers who have been negatively affected by the TCJA.”
Additionally, there are several ways to get credit for previous domestic R&D expenses, such as choosing to correct previous returns. So, small businesses should talk to their tax advisor about which method to choose, even if they have already submitted a 2024 return.
In 2025, all taxpayers will be able to take advantage of the need to use domestic R&D to depreciate, regardless of receipts. To receive credit for the past few years, businesses must have an average receipt of less than $31 million between 2022 and 2024. This is a bonus for small businesses. “This bill definitely has an advantage for small businesses,” Walker said.
Important interest credits related to loans
According to Colin Wilhelm, a policy analyst at the Washington National Tax Office at Grant Thornton, the big beautiful bill revives more generous calculations to deduct interest.
Starting with tax years beginning on or after December 31, 2024, the Act regains previously reduced EBITDA-based restrictions. This allows for higher profit deductions than EBIT-based systems.
“Many small businesses have to take on debts to continue growing, so they can deduct that profit and reinvest their savings in their business to continue growing,” Lauridsen said.
“There is no tax on tips” for owners
The provision has received significant coverage and the rules are still written, but it is noteworthy given the potential benefits for certain small businesses that can deduct up to $25,000 each year by 2028.
According to Rocket Legal’s Webster, self-employed individuals cannot deduct more than net profit from businesses that have acquired tips. Additionally, individuals with an individual taxpayer who amend adjusted gross income of more than $150,000 and a joint filer with $300,000 will not be able to use the deduction.
Wilhelm recommends that companies seeking to claim this deduction keep a careful record of tips. “I think there’s more scrutiny of these records by the IRS,” he said.
Reducing taxable income
Popular Qualified Business Income (QBI) deductions are currently permanent. This allows sole owners, partners and shareholders of Company S to deduct 20% of their business revenue, with certain exceptions.
The big beautiful bill will make it easier for more high-income small business owners to claim this deduction and expand the income range for eligibility starting next year. Eligible businesses with active business income of at least $1,000 are guaranteed a minimum of $400 deduction, which increases with inflation each year. Certain skilled services businesses, such as health, law, and accounting, have income limits to claim full deductions.
Employer-provided child care tax savings
According to the U.S. Chamber of Commerce Resource Guide, all businesses that provide childcare for employees will be subject to tax credits and will have expanded profits to small businesses with gross income in 2025.
Eligible small businesses can charge up to $600,000 and 50% of the cost. This additional benefit will require small businesses to evaluate their employees’ child care benefits or options to offer or expand programs, according to the Chamber of Commerce. If pooling is an option, you should consider coordinating with nearby companies.
