The Big Beautiful Bill and your taxes – that’s the phrase on everyone’s mind now that this sweeping tax reform has been signed into law. From bigger standard deductions to new credits for families and small businesses, the bill introduces major changes designed to ease the financial strain on everyday taxpayers. Whether you’re filing individually, supporting a family, or running a business, it’s worth knowing how these updates can help you.
Below is a straightforward breakdown of what’s in the bill, how it affects individuals and small business owners, and what steps you can take to prepare.
What Is the “Big Beautiful Bill”?
The Big Beautiful Bill (BBB) is a comprehensive federal tax reform package that aims to simplify the tax code, promote economic growth, and give more financial relief to lower- and middle-income families and small to mid-sized businesses. While details may evolve, the main provisions are set for the 2025 and 2026 tax years.
You can find official IRS tax updates and resources at irs.gov.
Big Beautiful Bill and Your Taxes: What Individuals and Families Need to Know
1. Larger Standard Deduction
The standard deduction is increasing once again — a welcome update for millions of taxpayers who don’t itemize.
New 2025 amounts:
- Single filers: $16,500
- Married filing jointly: $33,000
Tip: If you typically don’t itemize, this higher deduction means more of your income is automatically shielded from tax.
2. Expanded Child Tax Credit
Families will see bigger benefits. The Child Tax Credit is now $2,500 per child under 17 and fully refundable for many low- to middle-income households.
A new Young Adult Credit also offers $1,000 for dependents ages 17–20 still in school or training.
Tip: If you have dependents, update your W-4 form with your employer to increase your take-home pay.
3. Earned Income Tax Credit (EITC) Boost
The BBB increases both eligibility and credit amounts for workers without children, caregivers, and gig workers.
Tip: Even if you don’t owe any taxes, file a return – you could qualify for a refund of $500–$2,000.
4. New “Essential Needs Credit”
A new refundable credit will help offset rising living costs for lower-income earners:
- Up to $45,000 income (single)
- Up to $65,000 (married)
This credit targets essentials like groceries, utilities, and rent – easing inflation pressures.
Big Beautiful Bill and Your Taxes: Impacts for Small and Mid-Sized Businesses
Lawmakers clearly designed the BBB to strengthen small businesses and encourage growth.
1. Lower Corporate Tax Rate for SMBs
If your business earns under $2.5 million in net income, your federal tax rate drops from 21% to 18%.
Tip: Now is the perfect time to review your business structure. Some LLCs or sole proprietors may benefit by electing S-Corp status for greater savings.
2. New Deduction for Employee Training
Businesses can now deduct 150% of costs spent on workforce training, certification, or skill development programs.
Tip: This is a great opportunity to invest in your employees — their growth now brings added tax benefits.
3. Startup Credit Expansion
Startups can now claim up to $12,000 in credits over the first two years — with extra incentives for minority-owned and rural businesses.
Tip: Keep detailed records of early expenses and consult your tax advisor to claim every eligible deduction.
4. Gig Worker-Friendly Rules
The BBB simplifies tax filing for freelancers and gig economy workers, while improving access to retirement savings options.
Tip: Even part-time or side-hustle income can now qualify for additional business-related write-offs.
Big Beautiful Bill and Your Taxes: Other Key Updates to Know
- Green Incentives: Bigger credits for installing solar panels, buying electric vehicles (EVs) – including used EVs – and upgrading home energy systems.
- Education Savings: Expanded use of 529 plans now includes apprenticeships, trade programs, and career-switching courses.
- Healthcare Write-Offs: Lower thresholds for deducting out-of-pocket medical costs help families with large medical expenses.
Note: There are no changes to Social Security or Medicare tax rules, and capital gains rates remain unchanged for now.
Final Thoughts: How to Make the Big Beautiful Bill Work for You
The Big Beautiful Bill truly lives up to its name – it opens up real opportunities for taxpayers and entrepreneurs alike.
Here’s how to take advantage:
- Schedule a tax review before the end of 2025 to ensure you’re ready for the new rules.
- Adjust your withholdings or estimated payments to prevent surprises next tax season.
- Invest in your growth – whether through staff training, energy-efficient upgrades, or education – while the credits are still active.
At Rocket Tax in Brooklyn, NY, we help individuals and businesses make the most of these changes. Whether you’re a parent, entrepreneur, or both, we’ll help you keep more of your money in your pocket.
Need help understanding the Big Beautiful Bill and your taxes?
Book your appointment today and let’s make this new tax season work in your favor.