Tax-Free Tips, Bigger Deductions, and Less Paperwork—Here’s What Houston Entrepreneurs Need to Know
July 2025 brought a sweeping tax overhaul with the passage of the One Big, Beautiful Bill—a landmark federal reform that includes the Tip Protection Act and other major changes aimed at benefiting small business owners, gig workers, and self-employed professionals.
Whether you run a busy restaurant in Midtown, a beauty salon in the Heights, or a logistics LLC in Katy, this legislation affects how you pay taxes, structure your workforce, and plan for growth. SAS Tax & Business Solutions is here to help you make sense of it—and take full advantage.
The Tip Protection Act is a key section of the broader One Big, Beautiful Bill. It’s designed to:
Let’s break down what this means for your Houston-area business—and how you can use these changes to boost cash flow, stay compliant, and grow confidently.
Starting January 1, 2025, workers in tipped and overtime-eligible occupations can deduct:
That means no federal income tax is withheld on this portion of income—putting more money directly into your employees’ pockets.
The IRS will publish a final list of qualifying occupations by October 2025.
🧾 Note: This applies only to income tax, not to payroll taxes. Employers and employees must still pay Social Security and Medicare (FICA) on tips/overtime.
But be cautious: this isn’t a replacement for fair wages. Public sentiment around tipping is shifting, so use this strategically and ethically.
🔗 Related: Learn more about how our Start-Up Membership can help you stay compliant as a new employer.
If you’re self-employed or operate an LLC, sole proprietorship, or S-Corp, the pass-through deduction (Section 199A) just got better:
If your business earns $100,000 in qualified income, your deduction increases from $20,000 to $23,000—cutting your tax bill even further.
📈 This change benefits over 26 million small business owners nationwide—and thousands across Houston.
Want to maximize this? Our CFO Basic service is designed to help Texas entrepreneurs structure their income strategically for these kinds of savings.
If you’ve ever been swamped by IRS forms for small payments—this one’s for you.
⚠️ Warning: Even if no form is issued, you must report income. If you earn more than $400 net as a sole proprietor, it’s still taxable. Let our Bookkeeping & Tax package keep you audit-ready.
Back by popular demand: 100% Bonus Depreciation
This applies to purchases placed in service between Jan 2025 and Dec 2028.
Example: Buy a $50,000 delivery van? Deduct the full amount in 2025. No waiting 5 years to write it off.
SAS can help ensure your asset purchases are structured and reported correctly so you don’t miss these opportunities.
If you’re self-employed and financing your personal vehicle, up to $10,000/year in interest on your auto loan is now deductible—starting 2025.
That’s a huge break for:
And yes, this can stack with mileage or bonus depreciation if structured properly.
If you provide benefits to retain employees, you’ll love this.
Want to attract and retain great staff? These credits make it affordable.
Previously, R&D costs had to be amortized over five years. Now:
Perfect for:
Have you been innovating? We’ll help you claim refunds for past R&D spend.
To avoid “death tax” chaos, the law permanently raises the estate tax exemption to:
This ensures your family business, farm, or rental property portfolio can transfer without liquidation or massive tax bills.
Planning to pass your business on? Let’s talk legacy planning.
Texas has no state income tax—but these federal-level changes mean even more to local businesses. You get:
SAS Tax & Business Solutions works with Houston-area entrepreneurs every day to structure their operations for maximum benefit under current tax law.
The Tip Protection Act and its companion provisions are a win for small business. But with great opportunity comes the need for smart strategy and reliable support.
From hospitality to logistics to consulting, these changes can:
Don’t wait until tax season.
Let SAS Tax & Business Solutions help you plan ahead.
📞 Call us today at (832) 263-7308
📧 Or email [email protected]
Q: Are all tips tax-free now?
A: No. Only voluntary tips received in occupations that the IRS deems “customarily tipped” are exempt—think waitstaff, delivery drivers, hairstylists. Service charges or tips in ineligible industries won’t qualify.
Q: Do I still have to pay payroll tax on tips and overtime?
A: Yes. FICA taxes (Social Security & Medicare) still apply. The exemption only covers federal income tax.
Q: What if I don’t receive a 1099 this year—do I still have to report income?
A: Absolutely. If you earn more than $400 net from self-employment, you’re required to report it—even if you don’t receive a form.
Q: How long does the 100% bonus depreciation last?
A: From 2025 to 2028. After that, it will phase down unless renewed.
Q: Can I combine the auto loan interest deduction with mileage or depreciation?
A: You can’t double-dip—but with the right strategy, you can choose the most beneficial method. Let us help you structure it.
Q: Can SAS help me claim the R&D deduction for past years?
A: Yes! We can review your 2022–2024 expenses and amend your return if necessary.
