If you are related to a small business, you may have heard about “One Big Beautiful Bill.” In July, 2025, a law was signed, this sweeping tax and spending legislation is one of the most significant changes to the U.S. tax code since the Tax Cuts and Jobs Act of 2017. And much like that law, it brings a mix of opportunities and fine print that every business owner needs to understand before filing.
World Tax and Accounting is working with small business owners across Livonia, Michigan, and nationwide every day. Here is a plain-English breakdown of what the One Big Beautiful Bill Act (OBBBA) means for you.
Your Tax Brackets Are Now Permanent
For the past several years we have been seeing that business owners and their accountants have had to plan around uncertainty — the TCJA tax brackets were always set to expire. That uncertainty is now gone. The OBBBA has made the seven federal income tax rates — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — permanent. The income thresholds for each bracket will continue to adjust for inflation annually. For Michigan small business owners, this means you can now do longer-term tax planning with much more confidence.
100% Bonus Depreciation Is Back — and It Is a Big Deal
This is one of the most powerful provisions in the entire bill for small business owners. For qualifying business property purchased and placed into service after January 19, 2025, you can now deduct 100% of the cost in the first year. Now you don’t have as long to spread it across multiple years through standard depreciation schedules.
What is the feasibility of this in practice? If you bought new equipment, machinery, computers, or qualifying business property this year, you may be able to write off the entire purchase price on your 2025 tax return. This is a significant cash flow advantage — and one that many business owners are not yet aware of. This time is to talk to your CPA before year-end to make sure you are positioned to take full advantage.
The Standard Deduction Got a Meaningful Boost
In the year 2025, the law of OBBBA added an extra boost to the standard deduction on top of the regular inflation adjustment – $750 more for single filers and $1,500 more for married couples filing jointly. For 2026, the standard deduction rises further to $16,100 for single filers and $32,200 for married couples filing jointly.
For sole proprietors and self-employed Michigan residents who do not itemize, this is free money. A larger standard deduction means more of your income is shielded from federal tax before any deductions even apply.
Tips and Overtime Are Now Deductible
If you have employed tipped workers, this matters to you, because Employees in qualifying tipped occupations can now deduct up to $25,000 in cash tips received in 2025. Overtime pay deductions are also now on the table.
Michigan business owners those related in the food service, hospitality, and personal care industries, this is a meaningful recruitment and retention talking point. Your employees will take home more of what they earn.
Retirement Contribution Limits Increased
The OBBBA also included updated contribution limits. For 2026, the limit for 401(k) and 403(b) plans rises to $24,500, and IRA contribution limits increase to $7,500. If you are a business owner using a SEP-IRA or Solo 401(k) to reduce your taxable income – which you absolutely should be – these higher limits give you even more room to shelter earnings from tax.
What Michigan Business Owners Should Do Right Now
The One Big Beautiful Bill provides real opportunities, but its beneficial for those who plan ahead. Here is what we recommend doing before the end of 2026:
1 – Review any major equipment purchases you made this year and confirm they qualify for 100% bonus depreciation.
2 – Maximize retirement contributions before December 31.
3 – Talk to your CPA about whether your current business structure is still the most tax-efficient one under the new law.
4 – Do not ignore IRS notices. With tax law changing this significantly, compliance errors are rising. If you have received any correspondence from the IRS, act quickly.
The team of World Tax and Accounting of CPAs and Enrolled Agents stays on top of every law change so you do not have to. Whether you need tax planning, bookkeeping, IRS resolution, or fractional CFO services, we are here to help Michigan small businesses keep more of what they earn.
📞 Are ready to talk? Contact World Tax and Accounting in Livonia, MI today and let’s make the new tax law work for you.