The New House Tax Bill: 8 Things Every Small‑Business Owner Should Know

May 27 2025 

Why this matters in 30 seconds


Congress just moved a 1,117‑page tax bill a step closer to law. It is packed with breaks aimed at people who own a business, not people who only collect a paycheck. Below is the short list of changes most likely to hit your wallet.

Good News First

1. A bigger pass‑through discount

If your business profit shows up on your personal return (S‑corp, LLC, sole prop), you can now knock 23 % off the top before calculating income tax. Example: $100 k profit → you only tax $77 k.

2. Opportunity Zones revived

Roll any capital gain—crypto, stocks, sale of a business—into one of these designated zip codes and:

  • After 5 years: your taxable gain is cut by 10 % (30 % if it’s a rural zone).
  • Hold 10 years: the growth while you owned it is never taxed.

3. 100 % bonus depreciation is back

New equipment, office build‑outs, even a qualifying vehicle can be written off in full the year you buy it (retro to Jan 1 2025). No waiting five years to recover your cash.

4. One‑year write‑off for U.S. manufacturing buildings

Buy or build space you’ll use to make something—anything from furniture to food—and you can expense the whole building up front. Extra losses roll forward.

5. Entertainment write‑offs return

Because the bill stays silent on the 2017 ban, 50 % of golf, sports tickets, etc. becomes deductible again starting 2026—unless the Senate claws this back.

6. Feeding the team = 100 % deductible

Meals you provide on‑site for meetings or late nights go back to a full write‑off (was 50 %).

7. Overtime and tips are tax‑free—for workers

Employees won’t pay income tax on overtime pay or tips. (You, the employer, still owe payroll tax.)

The Catch

  • Payroll costs stay high. You still match 7.65 % FICA on those “tax‑free” overtime wages.
  • W‑2 earners get little. Most perks target business profit, not salary income.
  • States may scramble. If they follow federal taxable income, their budgets shrink unless they opt out.

What to Do Now

  • Run “what‑if” numbers before you change payroll or buy assets. The Senate can—and will—rewrite pieces.
  • Delay major moves until you see a final bill. Favor options you can unwind.
  • Keep receipts for meals and entertainment; the deduction depends on proof you had a real business purpose.

This summary is based on the House version passed May 22 2025. Details can change. Talk to your tax pro before you act.

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