Your 2025 Tax Playbook: A Guide to the New Rules for Small Businesses

For small business owners, staying on top of the ever-changing tax and regulatory landscape can feel like a full-time job. With significant new rulings and legislation taking effect in 2025, it’s more important than ever to be prepared. This guide breaks down the most critical changes, helping you navigate new challenges and take advantage of valuable opportunities to save money.

The Good News: Tax Breaks Are Here to Stay

Let’s start with the opportunities. New legislation, often referred to as the "One Big Beautiful Bill Act," has made several key tax provisions permanent, providing much-needed certainty for your long-term financial planning.

The QBI Deduction: The popular 20% Qualified Business Income (QBI) deduction, which was set to expire, is now a permanent fixture of the tax code. This is a huge win for pass-through entities like sole proprietors, partnerships, and S corporations. For 2025, the law also increases the income thresholds and introduces a new minimum deduction for smaller businesses and side hustles, so more people can benefit.

Bonus Depreciation and Section 179: Looking to invest in new equipment or software? The law permanently restores the 100% first-year bonus depreciation deduction for qualified property acquired and placed in service after January 19, 2025. This allows you to immediately deduct the entire cost of new and used assets. On top of that, the maximum amount you can deduct under Section 179 has more than doubled to $2.5 million.

R&D Expenses: Businesses that invest in domestic Research & Experimental (R&E) expenses can now deduct 100% of those costs in the same year they are incurred, a reversal of a less-favorable rule.

The Challenges: New Hurdles to Watch Out For

While the tax benefits are a welcome relief, 2025 also brings new compliance burdens that require your immediate attention.

Corporate Transparency Act (CTA): This new federal law requires many businesses to submit a Beneficial Ownership Information (BOI) Report to the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN). The deadline for most businesses created before 2024 is January 1, 2025. However, there is ongoing litigation surrounding this law that has led to a recent interim rule change, so it's a legal minefield. Be sure to check with a professional to understand the current requirements and how they apply to your business.

Overtime Pay Thresholds: The U.S. Department of Labor's new overtime rules are in effect, raising the minimum salary threshold for salaried workers to be exempt from overtime pay. This means you may need to either raise an employee’s salary or reclassify them to a non-exempt status and pay them time-and-a-half for all hours worked over 40 hours in a week.

A Note on Your Software

These regulatory changes are already impacting the tools you use every day. For example, starting April 1, 2025, QuickBooks Online Payroll will begin withdrawing payroll taxes with each payroll processing, rather than waiting until the taxes are due. This is a change that will directly affect your cash flow planning and requires you to take action by March 31, 2025, to continue using the automated service.

The Bottom Line: Be Proactive

In an environment with both new opportunities and complex new rules, bookkeeping has become more than just a chore—it’s a strategic necessity. The best way to navigate these changes is to stay informed, work with professional advisors like an accountant or legal expert, and use modern accounting software to help you stay compliant. By taking control of these new rules, you can ensure your business not only stays compliant but also takes full advantage of the new growth opportunities.