Thriving Stylist Podcast: Episode #396 - Big Beautiful Bill and How Stylists and Salons Are Impacted

Host: Britt Seva
Release Date: July 28, 2025
Podcast Description: Britt Seva explores the evolving landscape of the beauty industry, focusing on actionable marketing strategies and essential business skills for stylists and salon owners.

Introduction

In Episode #396 of the Thriving Stylist Podcast, host Britt Seva delves into the One Big Beautiful Bill Act (OBbba) and its ramifications for stylists and salon owners. Acknowledging her non-expert status in taxation, Britt emphasizes her comprehensive research and insights from trusted experts to unpack how this significant legislation impacts small businesses within the beauty industry.

Understanding the Big Beautiful Bill (OBbba)

Britt Seva begins by providing an overview of the OBbba, signed into law by President Trump on July 4, 2025. Dubbed "Big" due to its extensive provisions, Britt clarifies that her focus will be on the sections most relevant to stylists and salon owners, rather than exhaustively dissecting every component.

Britt Seva [00:47]: "I am not a CPA. I'm not a financial advisor, I'm not a tax expert... I'm a decent researcher."

Tax Brackets and Their Implications

To contextualize the OBbba's impact, Britt offers a primer on U.S. federal tax brackets, highlighting the progressive nature of the system where income is taxed at varying rates based on income levels.

Single Filers (2025 Rates):

• 10%: Up to $11,925
• 12%: $11,926 to $48,475
• 22%: $48,476 to $103,350
• 24%: $103,351 to $197,300
• Higher Rates: Up to 37% for incomes exceeding $626,350

Married Filing Jointly:

• 10%: Up to $23,850
• 12%: $23,851 to $96,009
• Higher Rates: Scales similarly, peaking at 37% for incomes over $1,252,700

Britt illustrates how these brackets operate incrementally rather than applying a single rate to total income.

Britt Seva [05:00]: "Only the amount over $626,350 is actually taxed at 37%."

Key Provisions of the Big Beautiful Bill

1. Permanence of TCJA Provisions

The OBbba permanently extends several provisions from the Tax Cuts and Jobs Act of 2017 (TCJA):

• Top Marginal Tax Rate: Maintained at 37%, reduced from 39.6%.

  Britt Seva [13:00]: "The reduction was set to expire in 2026. That's been made permanent."

• Standard Deduction: Increased from $6,350 to $12,000, nearly doubling the previous amount.

  Britt Seva [13:45]: "The TCJA increased the standard deduction, almost doubled it... That is also made permanent."

• Qualified Business Income (QBI) Deduction: Allows a 20% deduction on QBI for self-employed individuals and small business owners. Britt clarifies misconceptions, emphasizing it's based on profit post-expenses, not a direct 20% of total income.

  Britt Seva [21:30]: "QBI is the profit left over after any W2 wages... 20% of that 20,000 can be taken as a deduction."

2. State and Local Tax (SALT) Deduction Enhancements

The OBbba raises the SALT deduction cap from $10,000 to $40,000 for 2025, with annual increases of 1% through 2029, before reverting to the original cap in 2030. This primarily benefits those in high-tax states like California and New York.

Britt Seva [24:00]: "There is an increased cap from 10,000 to 40,000 for 2025 and that's going to increase by 1% annually..."

Changes to Taxes on Overtime and Tips

1. Overtime Compensation Deduction

Eligible employees can deduct up to $12,500 of their overtime pay annually, with married couples eligible for up to $25,000. This deduction lowers taxable income, provided employees earn below the high-income thresholds.

Britt Seva [28:15]: "Eligible workers who receive overtime pay can deduct up to $12,500 per year of their overtime pay."

2. Tips Tax Deduction

Similar to overtime, qualified tips allow self-employed individuals to deduct up to $25,000. Britt emphasizes that tips must be voluntary and not part of a mandatory service charge.

Britt Seva [32:00]: "Qualified tips... it's an amount that's determined by the person paying the gratuity."

Additionally, the OBbba introduces the FICA TIP tax credit for beauty service establishments, enabling salons to claim a dollar-for-dollar credit on the employer's share of FICA taxes paid on employee tips. This change can result in substantial savings for salon owners.

Britt Seva [35:20]: "This could potentially be huge... a massive windfall victory."

Practical Implications for Stylists and Salon Owners

Britt underscores the importance of understanding these tax changes to reduce taxable income and maximize financial benefits. She advises listeners to:

• Consult with CPAs: Essential for navigating complex deductions and credits.

  Britt Seva [39:00]: "If you're not already working with a bookkeeper and a CPA, I just cannot highly suggest it enough."

• Utilize Online Tools: Platforms like NerdWallet's tax calculator can help estimate tax liabilities and refunds.

  Britt Seva [38:30]: "NerdWallet tax bracket calculator... there are some really great tools there."

• Maintain Accurate Records: Especially for tips and overtime to ensure eligibility for deductions and credits.

Conclusion

In this comprehensive episode, Britt Seva effectively breaks down the One Big Beautiful Bill Act and its multifaceted impact on the beauty industry's financial landscape. By simplifying complex tax concepts and relating them directly to the experiences of stylists and salon owners, Britt equips her audience with the knowledge needed to leverage these changes for business growth and financial stability.

Britt Seva [45:00]: "Taxes are hard and audits are harder, so make sure that you have a good grip on all of these things."

Britt concludes with encouragement for continued business growth and financial savvy, reinforcing her commitment to helping stylists thrive in an ever-evolving industry.

Stay tuned to the Thriving Stylist Podcast for more insights and actionable strategies to elevate your beauty business.