How the One Big Beautiful Bill Act Impact your business

In the past months this bill was passed by the congress, which is a set of amendments to various tax deductions and reliefs. Turning them from temporary reliefs to permanent reductions. Check out the list of modifications and how these may affect your business and income as a worker.

On a unanimous voting sesion, the “No Tax on Tips Act” got passed by the Senate, and it’s a great step for workers of the industry. Let’s dive in and see where this Act stands and who could benefit from it.

No tax on tips (Sec. 70201)

Tips represent an important part of workers income and now they’re tax free up to $25,000 per year on tips income. To be eligible for this reduction, your job must be on the list of occupations created by the IRS as customarily receiving tips on before December 31, 2024. Occupations added later than this date may have to wait a while to get this benefit

Overtime payments are now tax free (Sec. 70202)

Individuals who receive overtime compensation up to $12,500 ($25,000 for joint filers) per year may deduct taxes ONLY to compensations like the “half” portion of “time-and-a-half” compensation, not the whole paycheck. This income must be declared on a Form W-2, Form 1099, or other specified statement furnished to the individual.

Does it start now?

The OBBBA is planned to come into effect from 2025 to 2028. But don’t worry if you are just catching up about these changes because the IRS through their official sites will update about these Act and provide transition relief for the remainder of the 2025 tax year, regardless of the scheme your corporation  is registered on.

*The information provided in this article is generic in nature and for informational purposes only, it is not a substitute for specific advice in your own circumstances.