Big changes are on the horizon for individuals, families, and businesses thanks to the newly passed One Big Beautiful Bill—a sweeping piece of tax and economic legislation backed by former President Trump and passed by the House in late May 2025.
If you’re a small business owner or high-income earner, the bill’s impact could be significant. From extending tax cuts to eliminating taxes on overtime, this legislation may reshape how you plan, save, and invest. Let’s break it down.
Key Tax Changes in the One Big Beautiful Bill
Extension of 2017 Tax Cuts
The bill locks in several provisions from the Tax Cuts and Jobs Act of 2017, including:
Reduced individual income tax rates
The 20% pass-through deduction (Section 199A) for business owners
An expanded standard deduction
This provides long-term clarity for individuals and business owners when planning taxes, investing, or choosing a business structure.
Source: Forbes – House Passes “One Big Beautiful Bill”
No Federal Taxes on Tips or Overtime Pay
One of the most headline-grabbing changes: tips and overtime pay will no longer be federally taxed.
This move is expected to benefit:
Hourly and service industry workers
Small business owners who pay hourly wages
Employers looking to incentivize productivity with overtime
Expanded Child Tax Credit
Parents will see a boost in the Child Tax Credit, with:
Increased refundable amounts
Expanded income phase-outs
Potential benefits for families with newborns or multiple dependents
New “Trump Accounts” for Newborns
The bill introduces federally funded savings accounts for children born between 2025–2029. While the mechanics are still being finalized, these accounts are designed to:
Promote long-term savings
Support education or first-home purchases
Replace previous government investment incentive programs
Source: The Sun – What Are Trump Accounts?
Other Major Provisions to Be Aware Of
Work Requirements for Medicaid and SNAP
Stricter work requirements could reduce eligibility for millions, raising concerns about accessibility and administrative hurdles.
Renewable Energy Credit Repeals
The bill accelerates the repeal of several renewable energy credits, impacting both consumers and developers in clean energy.
Source: Sidley – Summary of Energy Credit Repeals
Section 899 “Revenge Tax”
This provision imposes a retaliatory tax of up to 20% on businesses from countries that impose discriminatory taxes on U.S. companies. While aimed at global fairness, it could complicate international partnerships.
What This Means for You
The biggest takeaway from the One Big Beautiful Bill is this: it’s time to re-evaluate your tax planning strategy. Whether you’re a W-2 employee, business owner, or real estate investor, this bill could shift how and when you report income, claim deductions, or set up your business entity.
At King of Kings Firm, we’re already advising clients on:
Whether the pass-through deduction still provides the best structure
How to leverage overtime/tip exemptions
Planning for child-related credits or Trump Accounts
Preparing for changes to renewable energy deductions or tax shelters
Final Thoughts
This bill may be “big and beautiful,” but it’s also complex and layered. What seems like a win in one area could impact another—especially when it comes to business structure, investment strategy, and long-term tax planning.
Schedule a tax planning consultation with King of Kings Firm to get clarity on what this means for your finances in 2025 and beyond.
Frequently Asked Questions
When will the One Big Beautiful Bill take effect?
You must still report tip income, but federal income tax won’t be assessed on those earnings under the new law. Other taxes (like Social Security and Medicare) may still apply.
Review your entity structure, compensation plans, and any renewable energy strategies. This bill may change which deductions you can take and how you report income.
