Tax season is here again, and 2025 is bringing some updates that could affect how much you owe (or, hopefully, how much you save). If you’re a small business owner, staying on top of tax changes isn’t just about compliance—it’s about keeping more of your hard-earned money where it belongs.
But let’s be honest—most tax updates sound like a foreign language. No one wants to spend their time deciphering IRS jargon when there are businesses to run and customers to serve. That’s why we’ve broken things down in a way that actually makes sense. Here’s what’s changing for 2025 and how you can stay ahead of the game.
Let’s start with some good news—the IRS is giving you a little extra cushion when it comes to the standard deduction. Here’s what’s changing:
So, what does this actually mean for you? If you don’t have enough expenses to itemize deductions (think mortgage interest, medical expenses, or charitable donations), this standard deduction is what you automatically get to subtract from your taxable income. A higher deduction = less taxable income = paying less in taxes.
✅ What to do: If you’ve always claimed the standard deduction, this is an easy win—you’ll automatically get the bump. If you usually itemize, now’s a good time to compare and see if it still makes sense to do so.
Every year, tax brackets shift slightly to keep up with inflation, meaning you could land in a different tax bracket than last year—even if your income stayed about the same.
Here’s the breakdown for 2025:
.png)
If you’re right on the edge of a bracket, small adjustments (like increasing retirement contributions) could help lower your taxable income and keep you in a lower tax tier. Only the income in the following bracket gets taxed at the higher rate. You still benefit from those lower rates on the income within the lower brackets.
✅ What to do: Don’t assume you owe the same as last year. Check where your income falls and see if you need to make any tax-saving moves before filing.
If your business is an LLC, S Corp, or sole proprietorship, you’ve probably been benefiting from the 20% pass-through deduction (Section 199A), which lets you deduct 20% of your qualified business income. But here’s the catch—it’s set to expire at the end of 2025 unless Congress steps in.
What does this mean for you? If you rely on this deduction to lower your taxable income, 2025 might be the last year to take advantage of it. After that, your tax bill could jump unless Congress passes an extension or other tax changes in 2025.
✅ What to do: If you’re making financial plans for the future, talk to a tax professional about how this could impact your 2026 taxes. You may need to rethink your business structure or tax strategies.
If your business carries debt, listen up. The limit on how much interest you can deduct from business loans is tightening. Previously, businesses could deduct up to 30% of earnings (EBITDA), but in 2025, that could drop to 10%.
This could especially impact businesses that rely on loans for expansion, equipment purchases, or working capital.
✅ What to do: If you use financing, talk to an accountant before making any big borrowing decisions. Interest deductions are shrinking, so it’s important to plan accordingly.
Good news for anyone saving for retirement—2025 contribution limits are increasing.
This is a great opportunity to reduce your taxable income and save for your future.
✅ What to do: If you have the flexibility, max out your contributions to take advantage of these new limits.
If you’re thinking long-term wealth planning, this one’s for you. The estate tax exemption is rising to $13.99 million per person, meaning you can pass on more wealth without federal estate taxes kicking in. The annual gift tax exclusion is also increasing to $19,000 per person.
✅ What to do: If you’re considering passing assets to family members or loved ones, now might be a great time to revisit your estate planning strategy.
Taxes are complicated, but you don’t have to figure it out alone. At Dickerson CPA, we’re all about making tax season easy and helping small businesses keep more of their hard-earned money.
Here’s how we can help:
Don’t leave money on the table this tax season. Book a consultation with Dickerson CPA today and make sure your 2025 taxes are working in your favor.
