373 - What the Big Beautiful Bill Actually Means for Small Business Owners

On today's episode of the podcast I'm breaking down the good, the bad and the ugly of the Big Beautiful Bill and how it impacts small business owners.

The “Big Beautiful Bill” passed in July. Trump and the right are calling it a game-changer for small businesses and working families. On the surface, there are a few provisions worth celebrating. But as always, the devil is in the details. Much of the bill’s benefit flows upward, not into the hands of true small business owners, freelancers, or everyday entrepreneurs. Let’s break it down.

The “Good” (At First Glance)

There are some shiny pieces in the bill that sound great:

Bigger Deduction for Pass-Throughs
Owners of LLCs, sole proprietorships, and S-corps now qualify for a 23% deduction on pass-through income (up from 20%). If you’re already making decent money, this can cut your tax bill. If you’re curious how this deduction works, I discuss that towards the end of Chapter 4 in the Unf*ck Your Biz book.

No Tax on Tips & Overtime (for a while)
Tipped income up to $25,000 and overtime pay up to $12,500 can be excluded from taxes between 2025–2028, as long as you fall under certain income thresholds. That’s a temporary boost for some service workers. This is a tricky provision that will save some folks some minor taxes.

Child Tax Credit Bump
Families get a small, temporary increase in the Child Tax Credit, nudging it upward by $200. However, the bill also introduced stricter eligibility requirements. To claim the credit, both the taxpayer and the qualifying child must have valid Social Security numbers. This change could exclude millions of children from receiving the credit, particularly affecting low-income families

Permanent Expensing for Equipment

Businesses can now permanently write off the full cost of qualifying equipment in the year they buy it (100% Section 179 expensing). That’s useful if you’re investing in new tools, tech, or machinery.

Estate & Gift Tax Breaks
Family-owned businesses and farms get higher exemptions from estate and gift taxes, making it easier to transfer assets to the next generation without a huge IRS bill. This expands, once again, tax breaks for the ultra wealthy as the first $13.61 million was already excluded. 

The “Not So Beautiful” Reality

While the headlines sound fabulous, here’s what’s lurking beneath:

Temporary Gimmicks 

The no-tax-on-tips and overtime breaks expire after 2028. Same with the boosted child credit. They’ll feel good for a few years, but unless Congress acts again, they vanish.

Skewed Toward the Wealthy
According to the Tax Policy Center, 60% of the tax cuts in the bill would go to the top 20% of households, with more than one-third benefiting those making $460,000 or more. In contrast, the lowest-income 20% would see a tax cut of less than 1%, or about $160 on average, and including the loss of some Affordable Care Act health insurance premium subsidies, their net tax cut would fall to only about $60.

Additionally, the Congressional Budget Office (CBO) estimates that the top 10% of earners would see incomes rise by 2.7% by 2034 mainly due to tax cuts, while the lowest 10% would see incomes fall by 3.1% due to cuts to programs such as Medicaid and food aid.

These analyses highlight the disproportionate distribution of tax benefits, with higher earners receiving significantly more substantial cuts compared to lower-income households.

Cuts Elsewhere to Pay for It
To offset revenue loss, the bill guts key credits for clean energy and electric vehicles—areas where many small businesses and families were saving money. At the same time, it sets the stage for future cuts to social programs like Medicaid and SNAP that working families actually rely on.

Deficit Explosion
The Congressional Budget Office projects this will blow up the federal deficit. And history tells us that when deficits balloon, lawmakers often come for small business programs or the social safety net next.

Complexity Creeps In
Politicians called this “simplification,” but the IRS and tax pros now face a mountain of changes to implement. For many small business owners, that means more time with your accountant and more money out of your pocket just to stay compliant.

Health Insurance & Medicaid: The Coverage Cliff

If you or your team rely on the ACA marketplace, brace yourself: the enhanced premium tax credits that made health insurance more affordable are set to expire at the end of 2025. That means monthly premiums could skyrocket. A 60-year-old couple earning $85,000 could see their annual premium jump from around $7,000 to over $22,000 (Kaiser Family Foundation).

On the Medicaid side, the bill makes deep cuts—hundreds of billions of dollars over the next decade. It also reintroduces work-reporting requirements and forces enrollees to reverify eligibility every six months starting in 2027. Millions of people will fall through the cracks, not because they don’t qualify, but because the paperwork is too complex or because they lose hours at work.

For small businesses, this means:

• Higher costs if you cover employees.
• Less stable coverage for staff and contractors.
• Communities with more uninsured neighbors, which ultimately hurts local economies.

The Bigger Picture

The bill is marketed as “beautiful” because it offers short-term tax cuts and shiny perks. But it comes with a long-term price tag: exploding deficits, weakened safety nets, and higher health costs for millions. History shows us what comes next: calls for even deeper cuts to programs small business owners actually rely on, like SBA loans, workforce training, and infrastructure.

So yes, you might get a slightly bigger deduction today. But tomorrow? You’re looking at higher health premiums, fewer community supports, and a more fragile economy to build your business in. That’s not so beautiful.

My jaded take. Republicans have a tendency to cut programs that make real differences in people’s lives, they phase out health care assistance, cut medicaid, and act in favor of large corporations. But then they will throw us all an extra $200 tax credit, send it with a check with Trump’s signature. Maybe if we’re lucky, we will get a Trump commemorative coin, a hat, or a box of steaks. Wooo.

They rely on us remembering the simple things and forgetting about or not understanding the more complex laws they passed that furthers the wealth divide and makes life harder for almost everyone.

As always, stay informed, keep your tax pro close, and don’t buy the spin just because it comes with a flashy name.