When people talk about “Trump’s big beautiful bill,” they are usually referring to the Tax Cuts and Jobs Act that reshaped the tax rules starting in 2018. Even as new laws are discussed and some pieces move toward expiration, the framework from that bill still affects how Kansas City business owners choose entities, manage deductions, and plan for long term wealth.
Federal tax law can feel political and noisy. What really matters is how those rules change your cash flow, your take home income, and the value of your company over time. With thoughtful tax planning in Kansas City, shifting rules can become opportunities, not just compliance headaches.
At Derks Financial, we help owners sort out what actually applies to them, then line up bookkeeping, payroll, tax returns, and investments so they all point in the same direction. Our focus is practical: what decisions today can make your next five to ten years stronger and more flexible?
What Changed for Business Structures: S Corporations, LLCs, and C Corporations
One of the most talked about changes in that bill was the cut in the federal corporate tax rate. C corporations started facing a lower flat rate, which made some owners ask if they should switch from pass through setups like S corporations or LLCs taxed as partnerships.
At the same time, the Qualified Business Income (QBI) deduction appeared for many pass through businesses. Subject to limits, certain owners could deduct up to 20 percent of their qualified business income. This helped narrow the gap between C corporation and pass through taxation, but it did not affect every industry the same way.
Some professional service firms faced tighter income thresholds, while manufacturers, contractors, and many other trades could see more consistent benefits. Owners whose income levels went above certain ranges also saw phaseouts that changed the value of remaining a pass through.
Because of these moving pieces, entity choice is no longer something you decide once and forget. For Kansas City owners, smart tax planning in Kansas City now means reviewing:
- How much profit the business is retaining versus distributing.
- Whether QBI applies today and how it might change as income grows.
- Whether eventual sale of the business favors a certain structure.
• How state tax treatment lines up with the federal picture.
We regularly revisit structure with clients as income, staffing, and long term goals evolve, rather than waiting until a year with an unexpected tax hit.
Deductions, Write-Offs, and Depreciation: Where Business Owners Gained and Lost
That bill changed many day to day deductions. Meals remained partly deductible in most cases, but entertainment became much harder to write off. For owners who often meet clients at local events or sports games, that meant tracking costs more carefully and separating what was still allowed from what was not.
Limits on business interest expense began to matter for companies that borrow for growth. Some found that aggressive debt strategies no longer produced the same tax result, especially as revenue increased. Kansas City businesses with lines of credit or equipment loans had to review their projections more closely.
State and local tax rules also shifted, especially on the personal side, which affected owners who report business income on their individual returns. Planning around where and how tax is paid became more important for those with multiple locations or higher personal income.
On the positive side, bonus depreciation and Section 179 expensing became more generous for a period. It was easier to immediately deduct much of the cost of equipment, vehicles, and technology instead of spreading deductions over many years. That made it attractive to upgrade machinery, switch to better software, or refresh a small fleet.
Those benefits do not stay the same forever, because some provisions phase down or expire. Timing really matters. Working with an advisor on tax planning in Kansas City often includes deciding:
- Whether to accelerate or delay a major equipment purchase.
- How to spread projects over several years to balance deductions.
- When to recognize income, such as year end invoicing choices.
- How depreciation decisions affect bank covenants and valuation.
Thoughtful timing can help stabilize taxable income, avoid surprise spikes, and support a steadier growth path.
Employee Pay, Benefits, and Retirement Plans Under the New Rules
Tax law shifts also changed how owners think about paying themselves and their teams. The split between wages and owner distributions became even more important for S corporation shareholders, since it influences both payroll taxes and access to the QBI deduction.
Health insurance benefits and certain fringe benefits saw new limits or clarifications. Some perks that once flew under the radar lost their tax advantages, while others retained value if documented and structured correctly. Keeping policies clear and payroll records clean is now essential to avoid penalties or missed deductions.
Retirement plans grew in importance as tools to reduce current taxes and build long term wealth. Options such as SEP IRAs, SIMPLE IRAs, and 401(k) plans allow owners to save more for themselves while offering benefits to employees. In many cases, these contributions are deductible to the business, reduce taxable income, and support retention in a tight labor market.
Payroll tax rules also intersect with many of these decisions. Software alone is not enough if the underlying setup is wrong. Titles, compensation policies, owner health insurance, and fringe benefits all need to be aligned with current law, then updated when the rules shift again.
Planning Ahead: Navigating Expiring Provisions and Future Law Changes
Several key elements from Trump’s bill are scheduled to phase out or change in the coming years. Certain individual tax cuts may expire, the QBI deduction could change or end, and depreciation rules may tighten. For owners, that creates both risk and possibility.
Instead of reacting each April, we encourage multi year projections. Looking three to five years out can show how:
- Rising profits interact with expiring deductions.
- Entity choices might look under a different rate structure.
- Capital gains from a potential sale could be affected.
- Retirement savings strategies may need to adjust.
Coordinating bookkeeping, payroll, tax preparation, and investment management helps keep these pieces in sync. Decisions about buying equipment, adding partners, or opening a new location should reflect not only today’s tax code but also where it may head.
Ongoing, relationship based planning is the best way to adapt as Congress debates new rules or allows old ones to sunset. Short term headlines are less important than a steady process that checks in, tests scenarios, and keeps your strategy current.
Turning Complex Tax Law into a Strategic Advantage for Your Business
Tax law will continue to shift. The question is whether those shifts catch your business off guard or feed into a clear plan. Moving beyond once a year filing toward a year round mindset allows you to tie tax strategy to hiring decisions, capital investments, and long term wealth building for you and your family.
At Derks Financial, we help Kansas City business owners review entity structure, deductions, payroll setup, and retirement plans in light of recent and upcoming tax changes. By treating taxes as one part of a larger financial picture, you can align today’s decisions with the future you want your business to support.
At Derks Financial, we help you make confident decisions today that can improve your financial picture for years to come, including thoughtful
tax planning in Kansas City. If you are ready to be more intentional about how taxes affect your cash flow, investments, and retirement, we invite you to
contact us and start a conversation. You can also explore our broader financial planning and investment approach through our full range of
services. Together, we will create a plan that reflects your goals, minimizes surprises, and helps you stay prepared for what comes next.
