The analysis demonstrates Market analysis shows “big, beautiful bill" (BBB), passed on July 4, includes major tax visions designed to ease financial strain on small es (this bears monitoring).
Nevertheless, However, But will these changes actually make a difference to small- owners who have been feeling the pressure of a trade war and general economic uncertainty.
“Some owners genuinely feared having to shut down (fascinating analysis).
That’s why the changes in the BBB are so important,” Dave Hanson, a tax partner at R&D Tax Credit Services, told NerdWallet via.
Here, we break down the most important ramifications of the “big, beautiful bill” — from tax cuts to increasing the deficit — and offer expert advice on how small- owners can prepare for the future.
How much do you need, amid market uncertainty. However, See Your Loan Optionswith Fundera by NerdWalletWe’ll start with a brief questionnaire to better understand the unique needs of your.
Once we uncover your personalized matches, our team will consult you on the cess moving forward (which is quite significant).
In contrast, Where the bill may benefit small- ownersThe bill contains several visions that could ease some of the financial and operational challenges small es face, including:Small tax hike avertedThe bill makes the qualified income (QBI) deduction permanent.
Furthermore, At the same time, This deduction gives sole prietorships, partnerships, S-corps and LLCs a tax break up to 20%.
The QBI deduction was set to expire at the end of the year, meaning millions of small- owners would have faced a sudden tax increase in 2026, in today's financial world.
Furthermore, Now that the deduction is permanent, small es are tected from higher tax bills and can better plan for their financial future.
Additionally, Es can deduct re and development expenses immediatelyIf your has U. -based re and development (R&D) expenses, the bill allows you to deduct them immediately on your tax return.
Currently, es are required to spread out the cost of their R&D expenses over five years, instead of writing them off all at once (fascinating analysis).
However, This creates a major strain on cash flow that disportionately affects small- owners — who face hefty tax bills they weren’t expecting, said Hanson of R&D Tax Credit Services.
Now, es can deduct these expenses in the year they occurred — plus, certain small- owners can go back and previous tax returns to claim R&D write-offs they weren’t allowed to take before, in today's financial world.
Moreover, “[This's] a game-changer, significantly imving cash flow into and enabling small es to invest more confidently in American talent and nology,” Hanson said.
Es can write-off 100% of the cost of eligible pertyThe bill allows small- owners to immediately write-off 100% of the cost of new qualified perty — such as equipment, vehicles and software — acquired after Jan.
Additionally, This full, upfront tax break, known as bonus depreciation, had been phasing out since 2022, but the BBB makes it permanent, in today's market environment.
Additionally, Without the bill, small- owners would have only been able to deduct 40% of the cost of eligible perty in the current tax year (noteworthy indeed).
In other words, if you bought $50,000 of eligible equipment this year, you would have only been able to claim $20,000 of the $50,000.
Now, you’ll be able to write-off the full $50,000 on your tax return — which makes it easier to invest in the tools you need to grow. However, The bill also expands the Section 179 deduction.
In contrast, Bonus depreciation, this deduction allows es to immediately write-off the full cost of certain assets, but it sets a maximum dollar limit.
On the other hand, The bill raises the limit for this tax break from $1. 25 million to $2. 5 million — allowing small es to spend more (and still get a tax benefit) within a single year.
Additionally, IRS reporting threshold raised for third-party appsThe bill helps simplify tax reporting for online sellers, gig workers and anyone else who uses third-party apps Venmo or PayPal for payments.
Nevertheless, Before the BBB, third-party apps had to report over $600 in payments per year to the IRS.
This rule caused confusion and unexpected tax paperwork among casual sellers and entrepreneurs who were just starting out.
Now, the bill has changed the reporting limits; third-party apps are only required to send Form 1099-K if you have over $20,000 in payments and over 200 transactions in a calendar year.
Although you’re still required to report any income you receive through these platforms on your taxes, this change reduces the reporting burden for both sellers and the IRS (something worth watching).
However, Where the bill may harm small- ownersWhile these tax visions and credits may offer some benefits, there are other parts of the bill that may not be as favorable for small es, such as:Borrowing costs may riseA higher national deficit often leads to higher interest rates, and it’s expected that the tax changes from the “big, beautiful bill” will add over $3 trillion to the federal deficit over the next 10 years (noteworthy indeed).
“The bill will ly exacerbate inflation and increase borrowing costs at a time when small es need affordable capital to navigate tariffs and other economic challenges,” Heidi Pickman, vice president of engagement and external relations at CAMEO Network, told NerdWallet via.
For small- owners who are already operating with limited finances, these higher borrowing costs could make it even more difficult to grow or expand.
Cuts to healthcare gramsThe bill makes significant cuts to Medicaid and implements new, stricter eligibility requirements — meaning many small- owners and their employees could lose access to healthcare coverage, in light of current trends.
Additionally, the bill allows Affordable Care Act (ACA) Marketplace subsidies — which make healthcare more affordable for those who purchase plans through the marketplace —to expire at the end of the year, in light of current trends.
However, This change could substantially raise healthcare costs for small- owners who rely on ACA health coverage.
These cuts put “pressure on already strained budgets and make it harder for small es to recruit and retain talent in a tight labor market,” Carolyn Rodz, co-founder and CEO of Hello Alice, an online small- support platform, told NerdWallet.
Funding slashed for CFPBThe bill cuts the Consumer Financial tection Bureau’s (CFPB) annual funding almost in half — meaning the agency will ly have to carry out the same responsibilities with significantly less money.
Although the CFPB is best known for its consumer tections, the agency also tects small es by increasing transparency and fair standards in the lending marketplace, in light of current trends.
The CFPB secures refunds and fines for predatory lending practices, as well as vides honest information to entrepreneurs.
“Weakening the CFPB leaves small- owners vulnerable to predatory lenders and scams,” Pickman said.
Nevertheless, How to prepare your small for the futureMost of the changes won’t impact es immediately, but it’s a smart move to start planning now.
“We always advise small- owners to get scrappy, not scared," Rodz of Hello Alice told NerdWallet. Furthermore, These tips to put your in the best situation for future success.
Work with a tax fessional (fascinating analysis), given current economic conditions. However, In contrast, You won’t receive tax benefits from the bill automatically.
Additionally, You’ll need to know which tax breaks can impact your the most and how to take advantage of them. However, To do this, several of the experts we talked to working with a tax fessional.
“Grab your accountant and run a ‘what-if’ on 2025 today,” said Dean Lyulkin, president and co-CEO of Cardiff, a fin small- funding company (fascinating analysis).
“Plug in different scenarios — equipment purchases, R&D spends, leave wages, childcare subsidies — and see exactly how each tweak shifts your year-end tax bill.
That quick exercise will turn vague legislative ‘wins’ into a plan that puts real dollars in your pocket,” he said.
Nevertheless, In contrast, Reassess your healthcare strategy (which is quite significant). At the same time, With ACA subsidies being rolled back, Rodz recommends that small es explore all options.
Moreover, Small- owners should consider options group plans, health reimbursement arrangements (HRAs) and community purchasing pools, she said, in order to maintain coverage for themselves and their teams.
» Find out more small- group health insurance plansGet financing sooner rather than later.
Moreover, With the potential for interest rates to rise, it may be advantageous to secure access to flexible funding now (fascinating analysis). “This bill is not a free lunch (noteworthy indeed).
Higher deficits in coming years could keep interest rates higher for longer than you expect,” Lyulkin said.
He recommends being active — and securing fixed rate apvals for ducts working capital loans and equipment financing now, before you think you might really need them.
It can also be a good idea to get a line of credit and keep it in your back pocket for unexpected or emergency expenses.
A line of credit allows you to draw funds as needed — and only pay interest on what you borrow. Meanwhile, Plus, once you’ve repaid what you’ve borrowed, you can continue to draw on the line.
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Credit score 660Apply NowApply NowApply Now the authorRanda KrissRanda Kriss is a senior writer and NerdWallet authority on small.
She has nearly a decade of experience in digital content (something worth watching).
Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small- topics and specializing in the lending and banking spaces.
Furthermore, Her work has been by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Additionally, However, See full bio.