The New 2025 Tax Law—Plain English Guide for Wisconsin Families & Small Businesses

The summer of 2025 brought major tax news. On July 4th, the “One Big Beautiful Bill” (OBBB) was signed into law, reshaping several areas of the tax code. While the headlines have focused on political battles in Washington, what matters most for families and business owners in our community is how these changes will affect everyday tax prep and long-term planning.

At Millhouse Accounting, we’ve broken down the key provisions into plain language so you can see what matters for your household and your business here in Wisconsin.

SALT deduction cap raised

One of the most talked-about changes is the increase in the State and Local Tax (SALT) deduction cap. Beginning in 2025, the limit rises from $10,000 to $40,000 for joint filers. This is a huge win for homeowners in higher-tax states, but even Wisconsinites can benefit. Property taxes in places like Green Bay have steadily crept up, and this expanded cap provides more room to deduct what you’re already paying.

Keep in mind that there are income-based phase-outs. Families at higher income levels won’t get the full $40,000 deduction, so this isn’t a one-size-fits-all benefit. Smart planning is needed to make sure you’re claiming everything available without running into limitations.

Pass-through deduction made permanent

The Qualified Business Income (QBI) deduction—sometimes called the “20 percent pass-through deduction”—was set to expire after 2025. Under OBBB, it’s now permanent. That’s excellent news for small-business owners across De Pere and the greater Green Bay area. Whether you’re operating as an S corporation, partnership, or sole proprietorship, the QBI deduction remains a valuable way to reduce your taxable income.

But permanence doesn’t mean simplicity. Reasonable compensation rules for S corporation owners are still in place, and service-based businesses remain subject to income thresholds. Reviewing your entity structure before year-end is critical.

Bonus depreciation returns to 100%

Business owners purchasing equipment, vehicles, or technology will welcome the return of 100% bonus depreciation. This allows you to fully write off qualifying property placed in service after January 19, 2025. For many local businesses—from farms outside De Pere to manufacturing shops in Green Bay—this provision makes it much easier to reinvest in growth without sacrificing cash flow.

Remember, Wisconsin tax rules don’t always align perfectly with federal law. A professional review ensures you’re not surprised when state and federal returns don’t match up exactly.

No tax on tips and overtime

Two other changes that grabbed attention are the elimination of federal income tax on tips and overtime pay. This is particularly significant for restaurant workers, bartenders, and service-industry employees. In Green Bay’s growing restaurant scene, this change could put real dollars back in workers’ pockets. For small businesses that rely on tipped employees, payroll systems will need adjustments to track wages accurately while ensuring compliance.

Practical takeaways

While the OBBB creates opportunities, it also introduces complexity. Tax prep isn’t just about filing forms—it’s about strategy. Some deductions are bigger, but they come with caveats. Some provisions offer immediate benefits, while others require careful recordkeeping and planning to avoid mistakes.

If you’re a homeowner wondering how the new SALT cap impacts you, a business owner considering equipment purchases, or a service worker navigating the new rules on tips and overtime, now is the time to plan ahead.

At Millhouse Accounting, we work with families and businesses throughout De Pere and Green Bay to make sure they’re not only compliant but also taking advantage of every opportunity the new law provides. The 2025 tax season will be different, and proactive planning now will make a big difference when it’s time to file.

Final thought

Tax law changes always generate buzz, but the real value comes from understanding how they apply to your unique situation. OBBB may have simplified some things on paper, but it also created new wrinkles that demand professional guidance. Our team is here to help you navigate these changes with confidence.