Just as the Working Family Tax Cuts have made the 2025 tax season a less stressful and more lucrative one for average American families, this Tax Week, the other tax provisions in the One Big Beautiful Bill Act (OBBBA) have improved the financial freedom for the 33 million U.S. small businesses, 22% of which are women-owned. 

Freelancers, small businesses, and solopreneurs are expected to reap dividends of time thanks to less regulatory burden and simplified tax preparation, and many small businesses are expected to see greater refunds and increased opportunity for greater profits.

Here are the three provisions that are making the difference.

Qualified Business Deduction (QBI)

If your small business is a pass-through entity (i.e., sole proprietorship, partnership, S corporation, or LLC with some limitations), the OBBBA has made the Qualified Business (QBI) Deduction a permanent benefit. The 2017 Tax Cuts and Jobs Act created QBI and originally scheduled it to sunset in 2025. The OBBBA made permanent this business deduction of up to 20% of qualified business income, REIT dividends, and income from publicly-traded partnerships.QBI has different limitations based on the type of business, how much taxable income might be received, and any depreciable property owned, but this permanent deductible amount allows for the business owner to gain a greater return on their earnings, and even allows entrepreneurs with multiple entities to bridge them together as one entity in order to maximize their QBI deduction:

This change benefits small business owners, freelancers, and independent contractors—especially those running LLCs, S-corporations, or sole proprietorships. According to the Bipartisan Policy Center, this reform aims to simplify small business tax structures while ensuring competitiveness with C-corporations.

The QBI deduction gives a degree of certainty for small businesses that had not previously existed. Small businesses can now do longer-term planning and incorporate growth into their systems.

100% Depreciation on Business Assets

As a small business owner, I replace computers about every five years, and the upgrade, along with the renewal or purchase of requisite software packages can sometimes be a significant hit for a solopreneur who operates with thin margins. Under the OBBBA, businesses can now depreciate 100% of equipment purchased after January 19, 2025, with a scheduled depreciation still available over time. It’s an incentive to not only increase investment in one’s business, but affords more immediate cash flow so that a freelancer can pour that back into further business growth.

Saved From Paperwork

One of the biggest complaints of small businesses, particularly the solopreneur, is the burden of paperwork and regulatory adherence that the IRS places on small businesses. Burdens that large corporations can more easily outsource. 

Now, the OBBA has incorporated simplified reporting and less paperwork, specifically geared toward small businesses. For example, the Biden administration lowered the threshold for reporting 1099K or Venmo/Cash App payments to $600.00, creating the need for undue monitoring for small shops and platforms, not to mention an excessive amount of paper to file. The OBBBA eliminated this burden by raising that threshold to $20,000 plus 200 transactions.

Bottom Line

The Working Families Tax Cuts are not just about tax savings for families, but tax relief and red tape freedom for small businesses. These provisions ensure that small businesses are not left behind but will be empowered to grow.