How the One Big Beautiful Bill Affects Your Year-End Tax Plan

Lydia Desnoyers
1 day ago
6 min read

This blog explains how the One Big Beautiful Bill impacts year-end tax planning for small business owners. It highlights the key updates that affect deductions, major year-end decisions, payroll considerations for pass-through entities, and areas where business owners often overlook potential savings. The goal is to help you understand the changes, avoid surprises at tax time, and make more confident decisions before the year closes.

Two people working at a desk. One types on a laptop; the other holds tax documents. Charts and reports are visible. Mood is focused.

Year-end tax planning always comes with many moving parts, but this year brings something new. The One Big Beautiful Bill has introduced changes that can meaningfully shape what you owe and what you can save, and most business owners do not realize how much these updates can influence their bottom line until it is too late. I have already seen people confused about what the bill actually changes, which tells me one thing: this is the kind of update that sneaks up on you if no one explains it in a clear and practical way.

Most business owners will not feel the impact of these changes until they file in 2026 for the 2025 tax year, but the decisions they make right now will shape that outcome. My goal is to give you a clear breakdown of what changed and how it may affect your business, so you can finish the year with confidence and avoid the common issues that tend to show up during tax season.

A Quick Look at What the One Big Beautiful Bill Actually Does

The One Big Beautiful Bill introduces updates that affect how business owners plan, spend, and prepare for tax season. It focuses on things like:

Which deductions qualify
How certain expenses should be treated
Adjusted limits or thresholds
Updates for pass-through and self-employed taxpayers

In other words, it is a good time to review your usual year-end habits and make sure they still align with the updated rules.

The Most Important Changes to Know Before Year-End

Here are the three biggest ways the One Big Beautiful Bill may affect business owners this year:

Bigger immediate write-offs thanks to restored 100% bonus depreciation and higher Section 179 limits.
Continued access to the 20% Qualified Business Income deduction, which has now been made permanent.
Improved treatment for domestic research expenses, which can benefit business owners investing in development or innovation.

Updates to Popular Business Deductions

This includes categories like:

Business meals

Business meal rules have been clarified to help distinguish between different types of meals. True business meals, where business is discussed with a client, partner, or team member, are generally 50% deductible. Travel meals are also typically 50 % deductible but follow a separate set of rules. Convenience meals, such as grabbing food because you worked late, often do not qualify. Understanding these differences helps you avoid misclassifying expenses.

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Equipment or technology purchases

If you are planning equipment or technology upgrades, the timing of those purchases matters because of restored 100% bonus depreciation and higher Section 179 limits. Depending on when the equipment is placed in service, you may be able to deduct the full cost immediately. These timing differences can affect your taxable income, so it is worth taking a closer look before the year ends.

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Home office expenses

Home office deductions are still available, but the updated rules place a stronger emphasis on accurate measurement and documentation of the business-use portion of your home. This means you should be clear about which areas are used exclusively for business and ensure your calculations reflect that business usage accurately.

Sunlit desk with a laptop, tablet, mug, and notebook. Two potted plants flank the laptop. Wooden window in the background. Calm atmosphere.

Certain service-based costs

Some service-based expenses, especially those that blend personal and business use (such as software, apps, or tools), may require more precise categorization. The updated rules aim to reduce gray areas, so reviewing how you classify these costs can help you avoid misreporting and missing eligible deductions.

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Shifts in Income Limits or Qualification Thresholds

Some credits and deductions now adjust at slightly different income levels, which means a strong revenue year may place you in a new range. For example, if your revenue grew this year, you may find that certain deductions phase out sooner than before. This is especially important if your income was close to a threshold last year. Knowing where you land now can prevent surprises when it is time to file.

Updated Rules for Pass-Through and Self-Employed Business Owners

If you operate as an LLC, S Corp, sole proprietor, or do freelance or contract work, the bill includes updates that affect how certain expenses should be treated and how income is classified.

These updates may influence decisions like:

Year-end payroll for S Corp owners
When you make certain expenses
How you categorize mixed-use items or services
How you document business-use expenses if you are self-employed

How These Updates May Affect Your Year-End Tax Plan

The biggest shift this year is not only the bill itself but how the updates influence your year-end decisions.

Look at the timing of big purchases

With 100% bonus depreciation restored for qualified property placed in service after January 19, 2025, and higher Section 179 limits available, equipment and technology purchases may offer stronger deductions than in recent years. This makes the timing of big purchases especially important. Depending on when you place the item in service, you may be able to take advantage of immediate expensing instead of spreading the deduction over several years.

Review payroll if you are an S Corp owner

Updated guidance around expense treatment and compensation means your final payroll decisions for the year carry more weight than usual. They can influence both your deductions and your taxable income.

Revisit recurring expenses

Some items that used to be straightforward to categorize now require clearer documentation or may need to be placed under a different expense category to stay compliant with the updated rules. This includes subscriptions, tools, and mixed-use items.

Expense report with columns of figures for sales, accounting, finance, and HR. A black pen rests on the papers, suggesting analysis.

Double-check your estimated tax payment

If the bill affects the amount you expect to owe, your year-end payment may need an adjustment. This helps you avoid penalties and prepares you for a smoother filing season.

Red Flags That You Might Be Missing Something

If any of these sound familiar, it may be time to pause and take a closer look:

Your tax plan looks exactly the same as last year
Your business grew this year, but your strategy did not change
You made payroll or owner-draw decisions without reviewing new rules
You are unsure whether certain expenses still qualify
You rely on outdated assumptions or on what you did last year

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How to Stay Prepared Without Feeling Overwhelmed

You do not need to learn the entire bill or study every detail. A few straightforward steps can make a meaningful difference.

Start organizing your financials early
Review recent purchases or recurring subscriptions
Make a list of decisions still left to make before the year ends
Talk with a professional who understands the bill and your business model

Join the Year-End Tax Strategy Webinar or Schedule a Call

As you wrap up your year-end planning, having clear guidance on these new rules can make a real difference in your tax outcome. If you are reading this before December 10, I invite you to register for my year-end tax webinar, where I will walk you through these updates in clear, practical terms. Everyone who attends will receive my One Big Beautiful Bill Cheat Sheet, which explains the changes that matter most for small business owners.

If you are finding this after December 10, the best next step is to book a call with me so we can look at your specific situation together. This helps you head into tax season informed, prepared, and confident in your decisions.

Disclaimer: This blog is for educational purposes only. It is not tax, legal, or financial advice. Deductions vary based on business structure and individual circumstances. For personalized guidance, schedule a consultation with a qualified professional. This blog explains how the One Big Beautiful Bill impacts year-end tax planning for small business owners. It highlights key updates that affect deductions, major year-end decisions, payroll considerations for pass-through entities, and areas where business owners often overlook potential savings. The goal is to help you understand the changes, avoid surprises at tax time, and make more confident decisions before the year closes.