Tax laws continue to evolve, and 2025 introduces several important updates that could directly affect how your business manages deductions, reporting, and compliance. Whether you’re running an LLC, S-Corp, or corporation, staying informed on these changes can make a real difference in your financial planning.
At Estess CPA, we’re here to help you make sense of these updates—and find smart ways to adjust your strategy for the year ahead.
Here’s a breakdown of the key tax law changes businesses need to know for 2025:
1. Bonus Depreciation Continues to Phase Out
The bonus depreciation rate drops from 60% to 40% in 2025. This affects businesses investing in qualifying equipment and property. Instead of writing off most of the cost in the first year, deductions will now spread out over time.
Why it matters:
If your business is planning major purchases, timing may impact your tax savings. Careful planning around asset purchases can help you maximize what’s still available.
2. New Federal Tax Brackets and Standard Deduction Increases
Inflation adjustments are bringing changes to the federal income tax brackets and the standard deduction for 2025. If your business is structured as a pass-through entity, these updates could influence your personal tax bracket as well.
Action tip:
Review your business structure and income flow. The right setup could mean big savings come tax time.
3. Corporate Transparency Act (CTA) Deadlines
The Corporate Transparency Act is now fully in effect. Businesses formed in 2025 must report beneficial ownership details to FinCEN within 90 days of formation. For companies formed before 2025, the reporting deadline is January 1, 2025.
Heads up:
Failure to file can lead to steep penalties. If you’re unsure whether your business qualifies, get guidance sooner rather than later.
4. Lower 1099-K Reporting Threshold Stays in Place
The IRS has kept the $5,000 threshold for Form 1099-K reporting. This applies to businesses receiving payments through platforms like PayPal, Venmo, or online marketplaces.
What to do:
Make sure your record-keeping is accurate. Track third-party payments carefully to avoid surprises at year-end.
5. Business Deductions Restored Under the Tax Relief Act
The Tax Relief for American Families and Workers Act continues to restore some key deductions that had previously expired, including:
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Immediate deductions for domestic R&D expenses
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Full and immediate deductions for capital expenditures
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Relaxed limits on interest expense deductions
These changes aim to support business growth and encourage investment.
6. Global Minimum Tax Developments
While the U.S. has not fully adopted the 15% global minimum tax under the OECD/G20 framework, discussions continue. If your business operates internationally, this should stay on your radar.
Tip:
International companies should work closely with their CPA to stay prepared for potential policy shifts.
7. Higher Retirement Contribution Limits
The IRS has raised retirement contribution limits for 2025:
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401(k), 403(b), 457 plans: $23,500 (up from $23,000)
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Catch-up contributions (age 50+): $7,500 (unchanged)
This increase provides a great opportunity for both business owners and employees to boost retirement savings.
8. Updated Child Tax Credit
The maximum refundable portion of the Child Tax Credit rises to $2,000 per child for 2025. While this may not directly impact your business, it could affect payroll planning and employee benefits discussions.
9. Section 179 Deduction Limits Adjusted
For 2025, the Section 179 deduction allows up to $1,250,000, with the phase-out beginning at $3,150,000. This lets businesses deduct the full purchase price of qualifying equipment or software placed into service during the tax year.
Reminder:
Section 179 applies only if your equipment is purchased and placed into service before year-end.
10. IRS Focus on Compliance and Enforcement
The IRS remains committed to tightening oversight, especially in these areas:
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Employee Retention Credit claims
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Cryptocurrency transactions
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High-income earners and large corporations
To avoid penalties, businesses should double-check reporting accuracy and stay up to date with IRS guidelines.
Work with a CPA Who Keeps You Ahead of the Curve
Tax law changes can be tricky—but you don’t have to handle them on your own. At Estess CPA, we’re here to help your business stay compliant while identifying smart ways to reduce tax liability and improve your financial position.
Ready to Plan for 2025 with Confidence?
Whether you’re looking to navigate these new rules or improve your overall tax strategy, our team at Estess CPA is ready to help.
Contact Estess CPA
📞 Belle Chasse Office: (504) 433-5122
📞 Luling Office: (985) 785-1470
📧 Email: [email protected]
🌐 Website: www.estesscpa.com
Let’s make sure your business is ready to thrive in 2025.
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