The One Big Beautiful Bill Act Is Law: What It Means for Individuals, Small Businesses, and Higher-Income Households

Congress has officially passed the One Big Beautiful Bill Act (OBBBA), and the President has signed it into law. This sweeping tax legislation brings a range of changes that will affect how millions of Americans file their taxes starting in 2025. While some households will benefit from the updated provisions, others—particularly high-income families and W-2 employees—may find that not much has changed, and in some cases, deductions are still frustratingly out of reach.

At EZ Tax Services, we’re breaking down what this law means for individuals, small to medium-sized businesses, and mid- to high-income households as we head into the next few tax years.

W-2 Employees Still Can’t Deduct Home Office or Work Expenses

Despite hopes for expanded deductions in the remote work era, W-2 employees remain unable to deduct unreimbursed work expenses. This includes:

• Home office setup costs

• Internet, utilities, or rent allocated to a home workspace

• Office supplies and equipment

• Continuing education or professional licensing fees

• Mileage and travel not reimbursed by the employer

These deductions were eliminated under the 2017 Tax Cuts and Jobs Act, and OBBBA does not reinstate them.

For remote employees and salaried workers who regularly pay out of pocket for work-related items, this remains one of the most noticeable exclusions from the new law. Unless you are classified as self-employed, a statutory employee, or receive a qualified reimbursement under an accountable plan, these costs remain non-deductible on your federal tax return.

SALT Deduction Cap Eased—But Not for Everyone

One of the headline changes in the OBBBA is the partial relaxation of the State and Local Tax (SALT) deduction cap, which was previously limited to $10,000 per year for individuals and married couples filing jointly.

Under the new law:

• The SALT cap has been increased or removed entirely for many taxpayers, but...

• Households with Adjusted Gross Income (AGI) above $500,000 (MFJ) or $250,000 (Single/HOH) do not qualify for the expanded deduction.

This means that mid- to high-income households will still see limited benefit from the changes, particularly in high-tax states or among families paying significant property taxes. In other words, while some homeowners may now deduct their full state and local tax payments, others will see no change due to the income phaseout thresholds written into the law.

Small and Medium-Sized Businesses: Mostly Good News

The OBBBA includes several positive changes for small business owners, sole proprietors, and LLCs, particularly those operating in pass-through entities. Key provisions include:

• Expanded Section 179 deduction limits, allowing more immediate expensing of equipment and qualifying business assets

• Simplified reporting thresholds for 1099-NEC and 1099-K filings

• Improved deductibility of startup expenses for new businesses

• Enhanced tax credits for hiring, training, and equipment investment

Additionally, the bill makes it easier for small businesses to claim clean energy and tech modernization credits, especially if operating in designated opportunity zones or rural communities.

These updates could reduce tax burdens for eligible businesses and create new planning opportunities in 2025 and beyond. That said, these deductions come with documentation requirements, and business owners should begin reviewing their bookkeeping and forecasting processes now.

What to Do Next

Whether you're a W-2 employee, a business owner, or part of a high-income household, the passage of the OBBBA will likely affect your filing strategy and overall tax liability. Here's how you can prepare:

• W-2 employees: Don’t assume you can write off home office expenses—look into employer reimbursement plans instead.

• Small business owners: Evaluate whether your current structure (e.g., sole proprietor, LLC, S Corp) still makes sense under the updated code.

• High-income households: Work with a tax professional to identify remaining deductions and explore advanced planning tools (e.g., charitable giving strategies, income timing, or trust structures).

Final Thoughts

The One Big Beautiful Bill Act may offer relief to some and frustration to others. While it simplifies and expands deductions in certain areas, it still leaves W-2 employees with limited options and excludes higher earners from some of its most touted benefits.

At EZ Tax Services, we’re here to help you navigate these changes with clarity and confidence. Whether you need tax planning, bookkeeping, or help making sense of the new rules, we’ve got you covered.

Contact us today to schedule your year-round tax strategy session.