The Big Beautiful Bill - How Will It Impact You?

On July 4th President Trump signed The One Big Beautiful Bill into law.  The new bill contains several provisions that affect alarm and integration companies and their owners.  There has been a lot of misinformation in the media and hopefully this will clear things up. 

Here is what is, and what is not, in the bill:

• Permanent extension of lower tax rates and brackets: The bill makes permanent the individual income tax rates and brackets established by the Tax Cuts and Jobs Act (TCJA), including lower individual tax brackets. The top marginal rate remains at 37% for taxable income over $626,350 for taxpayers who are married and file jointly (MFJ), 32% for income over $394,600 (MFJ), 24% for incomes over $206,700 (MFJ), and inflation adjustments are retained for all but the top bracket
• Qualified Business Income (QBI) deduction. This is one of the items from the 2017 that has benefitted most alarm and integration companies.  The provision was set to expire in 2025 but has now been made permanent.  QBI is substantially the net income from businesses, such as S Corporations to each of the shareholders.  There are some limitations but it is a 20% deduction for the total QBI.  For example, an owner, who is the sole shareholder of an S Corporation with net taxable income of $100,000 would essentially only pay tax on $80,000.  This is a huge benefit and it pays to manage the QBI from your company to maximize the deduction. 
• Restoration of 100% bonus depreciation for property acquired after 1/19/25. This is a valuable deduction but, consider the QBI provisions above before aggressively expensing assets and lowering your net income.
• Estate and gift tax exemption: The increased exemption is made permanent and raised to $15 million per individual ($30 million for married couples) in 2026, indexed for inflation. This is an important item for company owners.  While the increased floor has been made permanent, there is no guaranty that future Tax Bills won’t lower it.  If your company is worth more than a few million dollars, you may want to contact your attorney about setting up a trust to transfer the company without a huge inheritance tax bite.
• SALT deduction cap: The state and local tax (SALT) deduction cap is increased to $40,000 per household and is phased out for taxpayers with modified adjusted gross income (MAGI) over $500,000. This is significant as many company owners with S Corporations have either not been able to deduct their state taxes on the income from the S Corp or have had to navigate the complicated State Income Tax payment rules.  You will now be able to deduct all or most of the taxes paid for your S Corporations and other pass thorough entities on your personal return.
• No tax on tips and overtime: For 2025–2028, above-the-line deductions are created for qualified tips (in certain occupations) and for overtime premium pay, subject to income and occupation limitations. This is significant as it allows your techs who want to work more hours to take home more of their overtime pay.  Even if you are paying an existing employee time-and-a half you will be dealing with a known quantity and will save recruiting, onboarding and training costs for a new employee.  Keep in mind that the IRS will most probably issue rulings limiting this deduction to workers who are classified as employees and receive W-2s.  This is a good time to start properly classifying your employees.
• The 1099 reporting threshold has been increased to $2,000, effective January 1, 2026. This should reduce the number of 1099s that you have to send to sole proprietors, but keep in mind that most workers don’t qualify as contractors so you should be issuing them W-2s. 
• Car loan interest deduction: For 2025–2028, up to $10,000 of interest on loans for U.S.-assembled passenger vehicles may be deducted, subject to income limits. No more sneaking your personal vehicles onto your company tax return to get an interest deduction. 
• Standard deduction: The standard deduction increased in 2017. It is now $30,000 for taxpayers who file jointly with their spouse and $15,000 for single taxpayers.  These have been made permanent, with an additional inflation adjustment and a temporary increase for 2025–2028 ($1,000 for single filers, $1,500 for heads of household, $2,000 for joint filers).
• Enhanced deduction for seniors: For 2025, a $6,000 deduction is available for seniors (age 65+) with income below ($150,000 (MFJ). This is to effectively eliminate the tax on Social Security benefits for low to middle income workers.