New Tax Breaks Every Business Owner Should Know About in 2025
The 2025 One Big Beautiful Bill Act (OBBBA) brings a wave of new and improved tax breaks aimed at reducing burdens and encouraging business growth. Whether you're self-employed or managing a multi-state enterprise, understanding how to leverage these changes can mean the difference between overpaying taxes and optimizing your bottom line.
1. 100% Bonus Depreciation is Here to Stay
Businesses can now permanently expense 100% of the cost of qualifying property under Section 168(k). This is huge for companies investing in machinery, tech, or vehicles, as it allows for immediate full write-offs rather than stretching deductions over years.
Applies to assets placed in service after Jan. 19, 2025
No more phase-down confusion
Includes newly grafted plants and certain specified assets
Note: Property acquired before Jan. 19, 2025 still falls under the old TCJA phase-down rules.
2. Section 179 Expensing Limits Skyrocket
The deduction limit jumps from $1 million to $2.5 million, and the phase-out threshold increases to $4 million, allowing mid-sized businesses to qualify for immediate write-offs.
Applies for property placed in service in tax years starting after Dec. 31, 2024
Indexed for inflation from a 2024 base year
Planning Tip: Great opportunity for companies making big equipment purchases or leasehold improvements.
3. The Qualified Business Income (QBI) Deduction Gets an Upgrade
Not only is the 20% QBI deduction made permanent, but there’s also:
A $400 guaranteed minimum deduction for active small businesses
Wider phase-in thresholds ($150,000 for joint filers)
Inflation adjustments start in 2027
This means more small businesses and solopreneurs can benefit, even if their income is modest.
4. Research and Development (R&D) Expenses Can Be Deducted Immediately Again
Domestic R&D expenditures can now be deducted in the year incurred, reversing previous amortization rules. Great news for startups, software developers, and innovative product creators.
Foreign R&D still requires 15-year amortization.
5. More Good News:
Charitable deductions now have a 1% floor for corporations
Business interest deduction base now includes depreciation and amortization (more interest = more deductions)
Depreciation rules now favor long-term equipment investments
Key Takeaways for Business Owners:
Do an analysis to see how you benefit from the equipment purchases made after January 19, 2025 to maximize deductions
Review entity structure and income thresholds to optimize QBI
Revisit R&D expenses and bonus depreciation strategies
Plan now—many of these rules affect tax years starting in 2025 or 2026
👉 Want help applying these changes to your 2025 tax plan? Book a strategy call with us today and make sure you’re not leaving money on the table.
