On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (H.R. 1) into law. This legislation is being hailed by some as a game changer for small businesses while being criticized by others as a potential fiscal time bomb. Whether you're building, scaling, or just trying to survive, this bill will significantly impact how you operate, whom you hire, and what you earn.
According to Lewis Rice LLP, the bill permanently extends the 20% Qualified Business Income (QBI) deduction for pass-through entities like LLCs and S-Corps, increasing it to 23% for some earners. The White House confirmed that full expensing (100% bonus depreciation) and expanded Section 179 limits are now permanent, providing small businesses with more aggressive write-off options for equipment, vehicles, and technology.
These provisions could save small business owners between $8,000 and $20,000 annually, depending on their business structure and revenue, according to estimates from the Tax Foundation. That’s cash flow you can redirect into hiring, marketing, or expansion.
However, these benefits come with trade-offs. A report by Politico highlights that the bill cuts Medicaid funding and repeals ACA marketplace subsidies for millions. The Congressional Budget Office (CBO) projects that between 11 to 17 million Americans could lose Medicaid coverage by 2034, impacting a significant portion of the low-wage workforce.
If your employees or customers fall into these categories, you may face greater financial burdens. As consumer spending declines and healthcare gaps widen, small businesses may feel pressured to offer more comprehensive benefits to avoid high turnover and decreased sales.
Businesses in clean technology, solar, or electric vehicle (EV) sectors are likely already feeling these pressures. According to Wired, the bill eliminates the $7,500 federal electric vehicle tax credit on September 30, 2025, and phases out related charger and solar credits shortly afterward. This change is expected to significantly affect demand in red states, where state-level incentives are not guaranteed to compensate for the loss.
Meanwhile, the administration is redirecting energy spending toward fossil fuel infrastructure, oil and gas permitting, and the Strategic Petroleum Reserve. This could be beneficial for businesses in logistics, drilling, or industrial contracting, but challenging for those selling to eco-conscious consumers or partnering with sustainable vendors.
The bill does include some increases in funding, such as a $150 billion boost for defense, artificial intelligence, and infrastructure spending, as reported by Military Times. This funding is earmarked for missile systems, AI platforms, shipbuilding, the Coast Guard, and cyber defense.
For small businesses in manufacturing, construction, or technology, this may open doors to federal contracts or subcontractor roles. However, competition will be fierce, and compliance requirements are expected to tighten, so you’ll need to act quickly and be prepared to meet federal standards.
Nevertheless, the bill carries a hefty price tag. According to the CBO, the One Big Beautiful Bill would increase total deficits by $3.4 trillion over the 2025-2034 period.
A report from Politico notes that this could lead to higher interest rates, future tax hikes, or cuts to other small business programs, especially if the bond market reacts negatively or inflation accelerates. While today’s tax cuts may provide relief, the broader economic context could change rapidly.
For small business owners, the tax benefits are substantial. You’re likely to see more money in your pocket, especially if you reinvest in tools, space, or staff. If you operate in construction, defense-related industries, or traditional energy, this may be a prime opportunity to grow.
However, if your business relies on lower-income customers, clean energy incentives, or ACA-driven health plans, you should prepare for potential challenges. With healthcare costs shifting, consumer purchasing power possibly decreasing, and green programs fading away, your ability to survive may depend on how quickly you can adapt.