Your Books Changed on July 4, 2025 — Here's What That Means for Flooring Contractors

A flooring shop with four crews and $1.2 million in annual revenue just had three of its biggest bookkeeping pain points shift overnight. The One Big Beautiful Bill was signed July 4, 2025, and it touches overtime deductions, subcontractor 1099 reporting, and equipment write-offs — all at once. If you haven't updated how you're tracking those items, your books are already behind.

Here's what changed, what it costs you to ignore it, and how good bookkeeping for flooring contractors keeps you on the right side of all three.

Overtime Pay Is Now a Deduction — But Only If You Track It Separately

Under the new law, overtime premium pay is deductible. That's the extra half-time portion — not the base wage, just the premium on top. For a flooring foreman earning $28 an hour who hits 10 hours of overtime in a week, the deductible amount is $14 per hour on those 10 hours, or $140 that week.

That sounds manageable on a single paycheck. Across a four-person crew running hot through a commercial tile installation — say, eight weeks of sustained overtime — you're looking at a meaningful deduction that disappears completely if your books don't separate the premium from base wages.

Most payroll systems report total wages as one number. If your bookkeeper is just pulling that figure and dropping it into labor expense, the overtime premium is buried. You need it coded separately to claim it. That means your Chart of Accounts needs a dedicated line, and whoever reconciles your payroll into the books needs to know to break it out.

This is not optional cleanup to do at tax time. It has to happen at the close of each period, job by job.

The 1099-NEC Threshold Jumps to $2,000 — Starting in 2026

Starting with tax years beginning after 2025, the Form 1099-NEC reporting threshold rises to $2,000 — so for those years, you file only for unincorporated subcontractors you pay $2,000 or more in a year.

Practically, this means fewer 1099s to file — but it also means your sub-tracking can't be sloppy. The deadline stays January 31 to both furnish the payee statement and file with the IRS. Miss that date and the penalty clock starts immediately.

Here's the bookkeeping trap: contractors often assume the threshold change means less work. It actually means you need cleaner year-to-date totals on every sub before year-end, because the cut-off line moved. If you've been loosely aggregating payments to a tile setter across three jobs, you need a clear cumulative number before December 31 to know whether you owe that 1099.

Good job-cost records solve this. When every sub payment is coded to the job and vendor at the time it's paid, running a year-end sub report takes minutes. When payments are dumped into a catch-all subcontractor expense, you're guessing — and guessing wrong costs you.

Section 179 and Bonus Depreciation: Equipment Costs That Can Hit in Tax Year 2025

The One Big Beautiful Bill reinstated 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025. Full write-off, in the year you put the equipment to work — no multi-year schedule.

For 2025, the Section 179 maximum deduction is $2,500,000, with the phase-out beginning at $4,000,000 of property placed in service. A flooring shop isn't hitting those ceilings. What matters for you is that a $45,000 floor-scraping machine purchased and put to work in tax year 2025 can be fully deducted in tax year 2025 under bonus depreciation, not spread across five or seven years.

The SUV cap is still in play — $31,300 for 2025 on sport utility vehicles under Section 179. If you bought a crew hauler that crosses into SUV territory, that limit applies. See Publication 946 (2025) for the property classifications that determine whether your vehicle hits this cap.

The equipment deduction is only as good as the purchase documentation behind it. Placed-in-service date, asset type, business-use percentage — your books need all of it, recorded at acquisition, not reconstructed in April.

What Flooring-Specific Bookkeeping Actually Needs to Capture

Flooring work pulls on all three of these changes simultaneously. You're running crews with overtime on large commercial installs. You're paying specialty subs — moisture remediation, concrete grinding, custom inlay work — who may or may not cross the 1099 threshold. And you're buying expensive equipment, from industrial staplers to wide-format cutters, that qualifies for accelerated depreciation.

Generic bookkeeping doesn't handle this. A bookkeeper who doesn't understand job costing for trade contractors won't know to separate the overtime premium, won't flag the sub payment that just crossed $2,000, and won't record the placed-in-service date correctly on a piece of shop equipment.

The numbers have to flow correctly at the job level — not just the company level — or none of the deductions line up with the work that earned them.

One More Thing Before Year-End

If your books are already a few months behind, the overtime tracking issue is compounding weekly. Every payroll period you haven't broken out the premium is a period you'll have to reconstruct from payroll reports later — if you can at all.

Getting current now, before Q4 commercial push season, puts you in a position to actually use the deductions the new law hands you.

Submit a pricing request at app.streamtaxes.com/get-pricing and we'll show you exactly what clean, flooring-specific books cost each month.