In July 2025, the U.S. government signed into law the One Big Beautiful Bill Act—a sweeping legislative package with major implications for taxes, federal spending, and small business operations nationwide. Whether you’re just getting started or scaling up, these changes will shape your finances, customers, and growth strategy in the years ahead.

Here’s a breakdown of what’s changing, what to watch out for, and how to position your business for success—no politics, just facts.

The Good: Expanded Deductions and Tax Relief

Many small business owners will benefit from provisions that reduce taxable income and extend key deductions:

1. Permanent Tax Cuts for Pass-Through Businesses

If you operate as an LLC, S corp, or sole proprietorship, your business income now enjoys permanent lower tax rates. This could save thousands of dollars annually—especially if you’re generating six figures or more.

2. New Write-Offs for Tips, Overtime & Commissioned Wages

Businesses can now deduct up to $25,000 for payments made to employees or contractors in tips, overtime, or commissions—encouraging performance-based pay.

3. Bonus Depreciation and Equipment Write-Offs

The bill restores and extends accelerated depreciation for equipment, tech, and software purchases. If you’re upgrading systems or expanding your tech stack, these expenses may be fully deductible in the year of purchase.

The Bad: Shrinking Customer Budgets & Support Programs

While tax relief is welcome, other changes in the bill could impact small business revenue and operations in less visible ways:

1. Cuts to Healthcare & Support Programs

Major reductions to Medicaid, food assistance (SNAP), and housing support are expected to reduce consumer buying power—particularly among working families, gig workers, and underserved communities. If you serve price-sensitive customers or rely on volume sales, this may affect demand.

2. Rollback of Clean Energy and DEI Incentives

If your business benefited from green energy tax credits or participated in federal programs supporting diversity, equity, and inclusion (DEI), those opportunities are being phased out. This includes funding for minority-owned businesses, women entrepreneurs, and ESG-aligned initiatives.

3. Potential Rise in Interest Rates

Due to the projected increase in national debt, economists expect upward pressure on interest rates. This may result in higher borrowing costs for business loans, credit cards, and equipment financing in 2026 and beyond.

 How to Succeed in This New Climate

This legislation brings both opportunity and challenge. The most resilient small businesses will adapt early and stay lean, flexible, and financially smart. Here’s how to stay ahead:

1. Maximize the Tax Wins

• Work with your accountant to restructure for pass-through tax advantages.
• Track all contractor bonuses, commissions, and tips for new write-offs.
• Plan strategic purchases now (hardware, AI tools, software) while depreciation benefits are high.

2. Reassess Your Customer Base

• Evaluate how policy shifts might affect your ideal clients’ financial outlook.
• If you’re in a service business, consider creating tiered pricing or payment plans to meet tighter budgets.

3. Diversify Income Streams

• Add digital products, affiliate partnerships, or subscription services that don’t depend on local demand or U.S.-only policies.
• Consider international expansion or remote services to tap into global markets.

4. Focus on Automation and Efficiency

• Use this period to implement AI tools and automation to reduce costs.
• Invest in systems that save you time and scale operations without hiring large teams.

Takeaway

The Big Beautiful Bill introduces a mixed bag of changes—lower taxes and more deductions on one hand, and tighter consumer budgets and fewer federal support programs on the other. For small businesses, success will come from understanding the landscape, adjusting early, and building lean, adaptive models that thrive regardless of what Washington does next.

At 360 Business Coach, we’re here to help you navigate every shift—with smart strategy, coaching, and the AI-powered tools to keep you moving forward.