There’s been a lot of buzz lately about the new “big, beautiful” tax bill signed by Trump. If you’re self-employed, a freelancer, or running a small business, you’re probably asking: Is this something I need to care about?

Short answer: yes.

But how it affects you depends on how you earn and spend your money. This bill is mostly an extension of tax cuts that were already in place from 2017, but that doesn’t mean nothing changed.

Let’s go over the highlights, the hidden downsides, and what to do next.

Key Changes in the One Big Beautiful Tax Bill

1- Extension of the 2017 Tax Cuts
The Tax Cuts and Jobs Act (TCJA) was about to expire. This new bill keeps most of those cuts in place through at least 2035.

Standard deduction stays higher ($14,600 for single filers, $29,200 for married couples in 2025)
Lower tax brackets continue
Personal exemptions remain removed

2- QBI Deduction Extended
The Qualified Business Income (QBI) deduction—aka the 20% deduction for freelancers, LLCs, and other pass-throughs—is still alive.
That’s a big deal if you’re self-employed and making a profit.

3- Child Tax Credit Increased
The credit goes up to $2,500 per child under 17, with higher income phase-out thresholds. Great if you’re raising a family while running your business.

4- Permanent Bonus Depreciation
Before, 100% bonus depreciation was slowly phasing out. Now, you can keep writing off big purchases (like laptops or office equipment) in full, right away.

5- Long-Term Capital Gains Rules Stay the Same
No major changes here, which keeps things stable for those with investment income or planning to sell a business or property.

New Deductions for 2025

In addition to extensions, the bill introduces four new deductions (FS-2025-03) that apply from 2025 through 2028:

“No Tax on Tips”

Deduct up to $25,000 in qualified tips
Available for employees and self-employed (except SSTBs)
Must be reported on a W-2, 1099, or Form 4137
Phases out at $150K income ($300K joint)

“No Tax on Overtime”

Deduct the “extra” portion of OT pay (the time-and-a-half part)
Max deduction: $12,500 ($25,000 joint)
Only applies to qualified OT under FLSA
Same income limits: $150K/$300K phaseout

“No Tax on Car Loan Interest”

Deduct up to $10,000 in interest on a qualifying new personal-use vehicle
Vehicle must be new, U.S. assembled, and purchased after Dec 31, 2024
Phases out at $100K income ($200K joint)
VIN must be included on your tax return

$6,000 Deduction for Seniors

Extra deduction of $6,000 per person age 65+
Available whether or not you itemize
Phaseout begins at $75K income ($150K joint)

READ THE IRS NEWS RELEASE

So What Does It Mean for You?

If you’re self-employed or own a small business:

You can still claim the QBI deduction
Bonus depreciation helps with equipment write-offs

READ MORE ABOUT DEPRECIATION

New deductions may apply if you receive tips, overtime, or bought a new car
Parents and seniors benefit from boosted credits and deductions
You’ve got more time to plan under this extended tax structure

But most of these benefits only work if your finances are organized. If you haven’t been tracking things or claiming your deductions properly, you might be missing out.

What Didn’t Change (or Improve)

While the “One Big Beautiful” Tax Bill extends some helpful breaks, it doesn’t fix everything, and some gaps are still there.

🚫 No new stimulus checks
There’s no extra cash coming like in previous years.

🚫 No extra deductions for side hustles
You still need clear records and real business intent to claim deductions. Nothing new was added for part-time earners or casual sellers.

🚫 No individual mandate
Health insurance penalties are still gone, which is good, but there’s still no tax credit boost for coverage, either.

🚫 No real boost for low-income earners
If your business income is low or inconsistent, the 20% QBI deduction likely won’t apply—or won’t help much.

🚫 Still no personal expense deductions
You still can’t write off things like personal rent, meals, or everyday clothes unless they’re directly tied to business use.

🚫 Bonus depreciation isn’t always helpful
Yes, you can write off big purchases—but doing that can wipe out your profit on paper. That may affect your ability to get loans, rent property, or qualify for a mortgage.

🚫 No new support for healthcare or retirement
If you pay out of pocket for health insurance or are trying to contribute to a SEP IRA or Solo 401(k), this bill didn’t add anything new for you.

🚫 Tax code is still complex
This bill extends tax cuts, it doesn’t simplify anything. Filing can still feel overwhelming, especially if you have multiple income streams or a growing business.

🚫 No SALT cap relief
The $10,000 cap on state and local tax (SALT) deductions is still in place. If you live in a high-tax state, you’re still limited on what you can deduct.

READ MORE ABOUT SALT DEDUCTION

🚫 Medicaid coverage could be affected
Some of the spending cuts in this bill may eventually impact Medicaid funding. This could make it harder for low-income individuals to access healthcare, especially in states that haven’t expanded Medicaid.

What You Should Do Now

Here’s how to stay ahead:

Keep clean records—especially if you’re deducting tips, overtime, or interest
Double-check your vehicle if planning to claim the car loan interest deduction
Track your income carefully for QBI and new phaseout limits
Claim every deduction you qualify for—even if you don’t itemize
Work with a tax pro if you’re not sure what applies to you

Final Thought

The “One Big Beautiful Tax Cut Act” mostly continues what we’ve seen the last few years. It helps if you’re profitable, organized, and already claiming your deductions. But it won’t fix messy finances or unclear income.

Need help making the most of it?
That’s what I’m here for. I work with freelancers, creatives, and small business owners to simplify tax season, and keep more money in your pocket, contact us today!