Knowing the tax law isn’t power. Using it is.

When my father started our CPA firm in 1971, he built it on relationships and a simple belief: Small businesses are the backbone of every community.

I grew up watching him work with shop owners, contractors, restaurants, manufacturers, and family-run firms who poured everything they had into keeping their doors open.

Fifty years later, I run the firm he founded, and I can tell you this: Running a small or mid-sized business in Illinois takes grit. We deal with some of the highest property taxes in the country, a complicated regulatory environment, rising labor costs, and constant economic uncertainty. Yet despite everything, Illinois business owners continue to show resilience.

That’s why when President Donald Trump signed The One Big Beautiful Bill on July 4, I paid very close attention. I’ve lived through every major tax law change since the 1980s, and most of them promised to help small businesses while delivering more complexity.

But this bill is different. For once, the people who stand to benefit the most are not corporations or Wall Street — it’s Main Street. It’s the family-owned firms, the S-corps and LLCs, the second-generation companies like mine, and the businesses that keep Chicago’s neighborhoods and suburbs alive.

One of the most important changes is that the 20% Qualified Business Income deduction for pass-through entities is now permanent. Under the previous law, it was set to expire after 2025, which made long-term planning nearly impossible. Now, owners of S-corps, partnerships, and sole proprietorships know they can rely on it for the future. Even better, more business owners will qualify because the income thresholds have expanded and the deduction phases in more gradually. There’s even a small minimum deduction in place for very small filers.

Stability in tax planning may not sound exciting, but as someone who has advised business owners for decades, I can tell you it’s invaluable.

The bill also brings back 100% bonus depreciation with no phase-out schedule, allowing businesses to write off the full cost of equipment, technology, vehicles, or facility improvements in the year they buy them. Section 179 expensing has been increased to $2.5 million, which means most small and mid-sized businesses can fully expense their capital investments.

For a contractor upgrading trucks in Elmhurst, or a manufacturer modernizing equipment in Addison, or even a dental practice in Arlington Heights adding new technology, this can lower taxes dramatically and free up cash for hiring and growth.

Illinois businesses in particular will appreciate the changes to the state and local tax (SALT) deduction. The original $10,000 cap punished residents of high-tax states like ours. The One Big Beautiful Bill raises and adjusts the cap through 2029, allowing many business owners and homeowners to deduct more of their property and state income taxes — at least until 2030, when the old cap returns. The relief especially is meaningful for suburban owners in places like Oak Park, Schaumburg, Arlington Heights, and Wheaton, where property taxes are a real burden. However, the deduction begins to phase out for those with income above $500,000, so planning carefully is key.

There are also new provisions affecting payroll. For 2025, tips and overtime receive more favorable federal tax treatment, and the IRS is expected to issue further guidance. This could reduce payroll tax friction and improve take-home pay, which is crucial for restaurants, salons, hotels, delivery services, and other service-based businesses. It’s not a total solution to labor costs, but it is a step in the right direction.

Another important fix the bill makes is restoring full expensing of domestic research and development costs. In recent years, businesses were forced to amortize R&D spending over five years, creating a cash flow nightmare for manufacturers, engineers, and technology firms. Bringing back immediate expensing supports innovation, and innovation is what keeps Illinois competitive.

On the individual side, the tax brackets remain at seven tiers — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — and these are now permanent. This matters because most small business owners report business income on their personal returns. When we know the tax rates won’t change dramatically every few years, we can plan reasonable compensation, dividend strategies, retirement contributions, and capital gains timing. The standard deduction also increases, and the Child Tax Credit rises to $2,200 per child. While these changes may seem minor, they add up for family-owned firms that employ relatives or pass businesses down to the next generation.

I’ve already seen how these changes can play out in real life. A restaurant owner in Schaumburg can now restructure payroll to take advantage of the new tip and overtime rules. A manufacturer in Addison can expense R&D and equipment in the same year to improve cash flow. A family business in Oak Park can confidently rely on the 20% QBI deduction and invest in growth rather than hoard cash out of fear of tax law changes. These are not theoretical benefits. They are real, tangible advantages — if owners take action.

That’s the key point. This bill rewards planning, not procrastination. It gives us tools, not handouts. It gives us certainty, but only if we choose to use it. Whether you need to revisit your entity structure, time your capital investments, rethink payroll strategy, or model state tax exposure, the smartest move is to sit down with a professional now, not after the year ends.

My father always told me, “Knowing the tax law isn’t power. Using it is.” For the first time in a long time, I believe Washington has passed legislation that truly supports small and mid-sized businesses. It won’t fix every challenge we face in Illinois, but it gives us something rare: room to breathe, room to build, and room to win.

Small businesses built this region. I believe, with the right planning, this bill gives us the chance to keep it thriving for the next generation — just like my father did for me.

• Michael Leonard is the managing partner of Leonard & Associates CPAs, a 50+ year legacy accounting/CPA firm in Oak Park.