Key Provisions of the OBBBA Every Entrepreneur Should Know
As a small business owner, I’ve learned that legislative shifts can either accelerate growth or introduce unexpected challenges. When President Trump signed the One Big Beautiful Bill Act on July 4, 2025, I saw a chance to transform tax changes into strategic advantages for my company—and for yours. In the sections that follow, I’ll share practical insights on how the Act’s expanded estate-tax exemption, revised SALT limits, and new benefits provisions can be woven into your succession planning, cash-flow management, and employee-benefit offerings to strengthen your enterprise today and secure its legacy tomorrow.
[TABLE OF CONTENTS]- Key Provisions of the OBBBA Every Entrepreneur Should Know
- Expanding Your Succession Toolbox with a $15 Million Exemption
- Maximizing SALT Benefits While Managing Income Thresholds
- Strengthening Your Workforce with Tax-Efficient Compensation
- Enhancing Employee Benefits with Expanded 529 Plan Uses
- Next Steps for Small Business Owners
Expanding Your Succession Toolbox with a $15 Million Exemption
The OBBBA raises the federal estate tax exemption to $15 million per individual (indexed for inflation), effectively providing married couples up to $30 million in combined exclusion. For closely held businesses, this increase presents an opportunity to facilitate ownership transfers without forced asset sales. I advise reviewing your buy‐sell agreements and trust instruments this quarter: by accelerating lifetime gifts or restructuring Dynasty Trusts and Spousal Lifetime Access Trusts (SLATs), you can lock in the higher exemption and ensure a smooth transition to the next generation.
Maximizing SALT Benefits While Managing Income Thresholds
Under the new law, the State and Local Tax (SALT) deduction cap rises from $10,000 to $40,000—but this upgrade phases out completely for individuals with adjusted gross income over $500,000. To prevent the loss of valuable deductions, consider timing bonus payments, deferring income, or accelerating charitable contributions. Family‐run partnerships and S-corporations should also evaluate income‐shifting techniques—such as allocating distributions to non-grantor trusts in lower‐tax jurisdictions—to preserve SALT relief and maintain cash flow for reinvestment.
Indeed, income tax planning just vaulted to the top spot for planning priorities.
Strengthening Your Workforce with Tax-Efficient Compensation
Between 2025 and 2028, tips and overtime earnings are exempt from federal income tax. For service‐oriented businesses, this provision can become a powerful recruitment and retention tool. Highlighting tax-free supplemental income may give you an edge in competitive labor markets. Additionally, the introduction of the “Trump Account”—a custodial IRA–style vehicle for minors with a $5,000 annual contribution limit—offers a unique benefit. By matching employee contributions or educating teams about these accounts, you demonstrate a commitment to their families’ financial futures.
Employee benefits, executive compensation, phantom stock, and other indirect methods of paying people for their contributions to your organization should be given a second or third look in light of the new OBBBA opportunities.
Enhancing Employee Benefits with Expanded 529 Plan Uses
The OBBBA also broadens qualified 529 plan distributions to include K–12 expenses such as tutoring, transportation, uniforms, and technology. As an employer, you can incorporate school‐expense reimbursement into your benefits package, providing personalized support that extends beyond traditional retirement savings. This level of flexibility not only differentiates your firm but also fosters employee loyalty and satisfaction.
Next Steps for Small Business Owners
The One Big Beautiful Bill Act delivers tools that, when employed strategically, can support business (especially a family business) continuity, optimize tax outcomes, and reinforce your commitment to employees and family members. To capitalize on these opportunities:
- Engage Your Advisors: Coordinate with your attorney, CPA, and financial planner to update succession documents and model SALT scenarios.
- Review Compensation Policies: Integrate tax-free tips, overtime strategies, and Trump Account contributions into your payroll and benefits design.
- Customize Education Benefits: Expand your benefits philosophy to include K–12 529 reimbursements alongside retirement offerings.
- Act Promptly: Many provisions are time-sensitive or temporary; beginning your planning process now will maximize long-term value.
Ready to align your small business strategy with the One Big Beautiful Bill Act?Contact AJ Yolofsky at Yolofsky Law for a tailored review of your succession plan, tax-minimization strategies, and employee‐benefit programs. Visit hello@yolofskylaw.com or call (954)466-5766 to schedule your consultation today.