Big Beautiful Bill - How It Affects You & The Industry w/ Michelle Cook CPA

In this episode of The Modern Hairstylist Podcast, host Hunter Donia sits down with Michelle Cook CPA to clarify what the so called Big Beautiful Bill actually changes for beauty professionals. If you have heard conflicting takes on tip taxation, entity status, and year end reporting, this conversation gives you straight facts on what is in the final law and how to prepare your business for it. 

Whether you are a W2 employee, a booth renter filing Schedule C, or an S corp owner, you will learn what qualifies, what does not, and what documentation you will need so your records match what the IRS expects in 2025. You will also hear which other provisions may help or hurt your bottom line this year so you can plan with your accountant before deadlines hit. 

Key Takeaways:

💰 Tip rules explained
The law allows a federal deduction for the first twenty five thousand in tips if you meet the requirements and file correctly. States may choose different rules, so confirm your state treatment with a professional. 

🧾 Reporting that counts
For W2 staff, tips must be shown in the tip boxes and in payroll tax filings. Contractors and booth renters should expect to rely on 1099 NEC or 1099 K reporting and keep clear backup since those federal forms are not changing layout for 2025. 

🏷 Entity specifics
Schedule C filers still owe self employment tax. Employers still owe FICA. The tip deduction is a federal income tax item, not a replacement for those taxes. 

📚 S corp action items
If you own an S corporation you must run tips through payroll to use the new benefit. Straight salary without reported tips will not qualify. 

🧠 Beyond tips
Permanent 100 percent bonus depreciation and the permanent Qualified Business Income deduction can improve cash flow on big purchases and profits. The child tax credit increases to two thousand two hundred per child and a portion of charitable giving is deductible without itemizing. The clean vehicle credit ends after September thirty. Some health premium credits expire which could raise costs. 

🏦 Better records better approvals
Accurate tip reporting can increase documented income which may help with loans for cars and homes. 

Why You Should Listen:

This is a clear and neutral walkthrough of what the law says and how it touches salon owners, independents, and employees. You will leave knowing what applies to you, what to change in payroll and point of sale, and which planning moves to discuss with your CPA so your 2025 filings are clean and your benefits are maximized. 

Follow Michelle on Instagram: https://www.instagram.com/smallbusinesscpa/

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