The One Big Beautiful Bill: Tax Changes & Strategies for Business Owners

In our recent webinar with Chris Hutchins, creator of All The Hacks, Gelt’s experts—Tal Binder (Founder & CEO), Rachel Richards (CPA & Product Manager), and Spencer Carroll (CPA & Account Executive)—explored how OBBB is reshaping the tax landscape for business owners.

‍Big Picture: What the Law Changed

Tal opened the discussion by explaining that OBBB’s biggest move was locking in many of the 2017 TCJA (Tax Cuts and Jobs Act) provisions that were about to expire.

Rachel, then outlined specific updates that matter most to business owners:

• SALT deduction cap raised to $40,000 per return (phasing back to $10,000 after $500,000 of income).
• Clean vehicle credit of $7,500 ends after September 2025.
• QBI deduction (20% for pass-throughs) remains, with easier access for some service businesses.
• QSBS exclusion increased to $15M for new issuances, with phased exclusions at years 3, 4, and 5.
• 100% bonus depreciation restored for qualifying property.
  
  

As Tal put it: “If you live in a high-tax state and earn under $500k, the new SALT cap could move the needle significantly.”

Entity Choice: Don’t Overcomplicate Too Soon

Spencer reminded attendees that you don’t need an LLC to start deducting expenses: “If you start a lemonade stand tomorrow, you’re already a sole proprietor and can write off ordinary and necessary costs.”

Tal added that entity choice should be separated into two layers: the legal structure (sole prop, LLC, partnership, corporation) and the tax election (how the IRS treats you). Because an LLC can elect different tax treatments, it’s often the most flexible.

To put it simply, the team suggested:

• Start easy. A sole prop or single-member LLC often works early on.
• Consider an S-Corp when net profits exceed ~$120–150k, but remember payroll and compliance costs.
• Tech startups or those planning outside investors may lean toward C-Corps.

Commonly Missed Deductions & Credits

The panel highlighted deductions that come up repeatedly when working with business clients:

• Self-employed health insurance premiums.
• Home office deduction, if space is used exclusively for business.
• Retirement plan startup credit (up to $500).
• R&D credit, which can apply more broadly than many expect—even to service professionals.
• Business-use purchases (equipment, office supplies, even workspace plants).
  
  

Rachel emphasized that owners often dismiss deductions because they feel “too personal,” but if an expense is directly tied to business activity, it can qualify.

SALT and the PTE Election

One of the most engaged parts of the webinar was the discussion around state and local taxes (SALT) and the PTE (Pass-Through Entity) election.

Rachel explained that with the new $40k SALT cap, many owners may no longer need PTE elections to unlock deductions—but for high earners in states like California or New York, the election can still mean tens of thousands in savings.

Tal emphasized the deadlines: “Miss June 15 in California or March 15 in New York and the option is gone for the year. There’s no flexibility.”

Reasonable Salary: Striking the Balance

For S-Corp owners, multiple questions came up around how to pay yourself.

Tal explained that a reasonable salary means documenting what someone in your role would earn across the duties you perform—engineering, sales, administration—and paying yourself a W-2 for that amount.

Rachel added that the right balance matters because:

• Salary is subject to Social Security and Medicare.
• Distributions are not.
• The ratio affects your QBI deduction and retirement contribution limits.

Retirement Planning Opportunities

Rachel highlighted that business owners have far more retirement savings options than W-2 employees.

• With a Solo 401(k) or SEP-IRA, you can contribute ~$70k annually.
• With a cash balance or defined benefit plan, contributions can reach $200–300k+ per year.
• Hiring your children legitimately gives them earned income that can fund a Roth IRA.

Bonus Depreciation and Vehicles

The webinar chat lit up when the team covered bonus depreciation.

Spencer explained that OBBB brought back 100% expensing for qualified property, including vehicles:

• Must weigh over 6,000 lbs GVWR (SUVs, trucks, some EVs).
• If used 100% for business, the entire purchase price is deductible in year 1.
• Loan interest is deductible too.

Rachel added that while you don’t need to track every single mile, you do need credible records of business use.

Real Estate and Cost Segregation

Tal closed this section by pointing to cost segregation as a way for real estate investors to accelerate deductions. But he cautioned that unless you qualify as a real estate professional, losses stay passive and can’t offset other income.

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Key Takeaways from the Webinar

• OBBB extended many TCJA provisions, added new rules, and created fresh planning opportunities.
• Entity structure should evolve with your profits and goals—don’t overcomplicate early.
• Many deductions go unused (health insurance, home office, R&D).
• SALT relief changes the PTE calculus—check deadlines and weigh trade-offs.
• Balancing salary and distributions is critical for S-Corp owners.
• Retirement planning can be much more flexible (and generous) when you own the business.
• Bonus depreciation is back, document your use carefully.

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Next Steps: If you couldn’t attend live, the webinar recording is available. And if you want help applying these strategies to your own business, schedule a free consultation with Gelt.

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