Big Tax Changes Are Coming: What Business Owners Need to Know About OB3

If your inbox is full of vague headlines and social media is buzzing with “No More Taxes on Social Security!” — take a deep breath. Here’s what’s actually happening.

OB3 (a.k.a. One Big Beautiful Bill) just passed, and while some of it’s good news, there’s also a pile of fine print. And guess what? I’m spending the next few weeks swimming in it — taking continuing ed classes, decoding legalese, and making sure my clients (you) get what they need to stay compliant and save money.

But since I know you don’t have time to read 400 pages of tax law either, here are the most important highlights you need to know now — especially if you’re a small business owner.

🧓 Social Security Is Not Suddenly Tax-Free

You may have seen a misleading email from the SSA. Let’s clarify:

• Starting in 2025, seniors 65+ will get a $6,000 below-the-line deduction.

• It phases out at $75,000 for single filers, or $150,000 if married filing jointly.

• It expires after 2028.
  So no, your Social Security isn’t tax-free. But it is getting a small break.

💸 Tips Won’t Be Federally Taxed — But Don’t Celebrate Just Yet

Starting in 2025, tips that are freely given (read: no auto-gratuities) won’t be subject to federal income tax. But:

• You’ll still owe FICA and state taxes.

• It’s capped at $25,000 per year and phases out at $150k/$300k AGI.

• Accounting systems need to separate taxable from non-taxable tips.

If you run a restaurant or bar, talk to your bookkeeper ASAP to get ahead of this.

⏰ Overtime Deduction for Employees — with a Catch

Also effective 2025:

• Employees can deduct up to $12,500 of overtime ($25,000 MFJ).

• It’s a below-the-line deduction, meaning it reduces taxable income — not AGI.

• Same income phaseouts as above.

• W-2 forms are changing — so employers must track overtime separately.

If you’re still tracking payroll in spreadsheets... might be time for an upgrade.

☀️ Solar & EV Credits Are Leaving Town

If you've been thinking about solar panels or an EV:

• Solar credit (30%) disappears after December 31, 2025

• EV credit ($7,500) ends in September 2025

Translation: Buy now, or miss out.

📅 What’s Next?

I’ll be sharing more details in upcoming blog posts, newsletters, and on social. Follow me so you don’t miss it — or better yet, book a tax planning session for August and we’ll go over what OB3 means for you.

Need to get on the calendar? Email Megan at megan@ratliffaccountingtax.com.

Until then — stay informed and keep your receipts.

—Rachel